An important concept in the calculation of employee compensation is the definition of a work week. A work week is any period of 168 consecutive hours that recurs consistently. Thus, management can set any start and ending dates and times as being the official corporate work week – but it must apply that work week consistently.
To prevent confusion among employees, it is best to retain the same work week definition in perpetuity, barring a justifiable reason for changing it. It is useful to list the beginning and ending dates and times for the company work week in the employee manual, so that everyone knows the time period over which they are being paid.
The definition of a work week is important for two reasons:
- Pay day. If a company lets a certain number of days pass from the end of a work week until the day on which paychecks are handed to employees, then pay day is derived from the ending date of the work week.
- Overtime. If overtime is based on the number of hours worked in a work week, then it is possible that the work week can impact the calculation of overtime pay.
If a company buys another business, mandate the same work week for both entities. Otherwise, it will be inefficient to track differing work periods, probably with different payroll cycles.
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