Why Do Employers Hold Your First Paycheck: 3 Reasons

Uncovering the answer to the question, “Why do jobs hold your first paycheck?” helps clear any possible salary-related misunderstanding between a newly hired employee and their employer.

Some of the reasons why an employer might hold an employee’s first paycheck include encountering mistakes in processing payroll, needing to verify the new hire’s tax information, or ensuring employees complete their probationary status at work.

There is more to learn about why employers hold your check, and this article will delve deeper into the reasons and the legality of withholding employee salaries.

Let’s begin!

Key Takeaways

• Knowing the answer to the “Why do jobs hold your first paycheck?” question allows you to manage your expectations when anticipating your salary in a new work setting.
• Pay stub withholding for new hires may be due to either an existing company policy, certain payroll errors, or pay period misalignment.
• There are different payment methods in which an employer may send an employee’s first paycheck, including cash, using direct deposit or mobile payments, and issuing a pay card or bank check.
• It is illegal for jobs to hold first paychecks or employee paychecks in general. However, if the employer has a valid reason for doing so, they must communicate clearly and immediately with their employees.

Understanding What Holding a Paycheck Means

Holding a paycheck means suspending the release of an employee’s salary on the scheduled pay date. In other words, the employee may not receive their pay on the expected payday.

One common example of an employer withholding paychecks is when discrepancies arise with an ongoing payroll cycle, and the employer has to make the necessary adjustments to resolve the issue.

A payroll cycle or pay cycle is the time span between two succeeding pay periods that guides employers in organizing their pay schedule and determining when to pay their staff.

Businesses differ when it comes to their preferred pay schedules. As such, employees may be paid weekly, biweekly, semi-monthly, or monthly.

Employees whose paychecks were withheld may have to wait days before their salary is disbursed into their account. The time it takes before they receive their pay also depends on the payment methods used by their employer to compensate employees.

Do All Employers Hold First Paychecks?

Fortunately, not all employers hold first paychecks because holding first paychecks depends on their existing payroll policies and the efficiency of their payroll administration practices.

Employers may not withhold their workers’ pay stubs without a valid reason. If they do, employees may dispute their unreleased salaries. Otherwise, they may be subject to face legal action and penalties depending on the severity of their violation.

3 Reasons Why Jobs Hold Your First Paycheck

There are three main reasons why jobs hold your first paycheck, namely payroll processing delays, misaligned pay periods, and the employee’s probationary work status.

Let’s take a closer look at each of the possible explanations as to why employers or jobs hold your first paycheck:

#1. Delays and Mistakes in Payroll Processing

At times, jobs hold your first paycheck due to certain payroll processing delays or discrepancies. These delays are often the result of payroll errors such as:

• Miscalculated pay
• Employee is yet to submit a completed W-4
• Failure to meet payroll deadlines
• Wrong tax rates levied on the employee’s gross income
• Disorganized paycheck records

Aside from that, another reason why jobs may hold your first paycheck may be your employer using outdated payroll software and encountering technical errors while preparing your salary.

As such, they may have lost access to your pay information and need additional time to retrieve the details and prepare your compensation.

#2. Pay Period Misalignment

It is also possible that a company withholding a check compensates its staff in arrears. Compensating employees in arrears means that your employer pays you for the work hours you’ve completed from a previous pay period.

Now, let’s say you started working at your new job in the middle of an ongoing pay period. That means there isn’t enough time to process and calculate your earnings and deductions before salaries are released.

As such, your accumulated work hours will be included in the next pay cycle, and your first paycheck will be withheld or delayed until the following payday.

#3. Probationary Period

The third reason why jobs hold your first paycheck may be because you are still under a probationary period. The said practice or policy is common in organizations that frequently experience high turnover rates, especially with their newly hired staff.

Although highly unethical, employers may be withholding the first pay stubs of newly hired employees to motivate them to persevere and complete the probationary stage of their employment. It should be noted that this behavior may end up having legal repercussions.

What’s the Amount You Can Expect on Your First Paycheck?

The amount that you can expect on your first paycheck will depend on the date when you started working, your mandatory and voluntary deductions, and your employer’s payment schedule.

Below are brief explanations of how these three factors can affect your first paycheck:

Your Start Date and Employer’s Payment Schedule

New hires usually start working in the middle of the month. What this also implies is that you will have worked for fewer days, so your first pay will be prorated or calculated based on the number of work days you’ve completed from the start of your employment.

When referencing your starting date to determine your first salary, remember to include the payment schedule implemented by the company where you’re employed.

For instance, if your employer pays you biweekly and you start working in the middle of the week, then you’ve only generated income for a few days.

Or, your employer compensates you monthly, and you begin working towards the end of the month. Since you still started working at a later time during the ongoing pay period and have only accumulated a certain number of work hours, then your total gross income remains much lower than your expected salary.

Mandatory and Voluntary Deductions

At the start of your employment, the HR department will also require you to submit a completed and updated Form W-4. This form provides your employer with crucial details about your tax situation, such as your eligibility for certain tax deductions, filing status, and dependents.

Besides your income taxes, you must consider your voluntary deductions as well. Your voluntary deductions include your health plan coverage, group term life insurance, union dues, and retirement plan contributions.

If you want to estimate the amount on your first paycheck, follow the steps below:

1. Calculate your gross earnings. To do this, add the total work hours or days you’ll be completing during your first week or pay period. Multiply the sum by your hourly or regular rates.

2. Subtract your deductions. Add your mandatory and voluntary deductions, and then subtract the resulting value from your gross pay.

3. Get the value of your net pay. The difference between your gross pay and deductions will yield your net income or the amount you’ll be receiving once your employer releases your paycheck.

How Can You Receive Your First Paycheck?

There are different ways in which you can receive your first paycheck, depending on the payment methods or channels used by your employer.

The most commonly used ones include:

• Direct deposit. This method involves electronically transferring salaries from the employer’s or company’s bank account to that of the employee’s. Direct deposit payments usually take up to three business days to process.

• Bank check. Bank check payments entail employers writing their employee’s net earnings on a check. The bank then withdraws the amount from the drawer or the employer’s account and sends the money to the employee’s account.

• Mobile payments. Some employers use mobile payment apps such as Google Wallet, Cash App, Apple Pay, or PayPal. This payment method is much faster and more convenient compared to all the other payment methods in this list.

• Cash. An employer may also pay employees directly in cash. In truth, cash payments are not that ideal in this day and age, given the availability of secure and more convenient payment channels.

• Pay card. An employer may also issue pay cards or prepaid debit cards to their employees. The pay cards are linked to each employee’s bank account.

Is Holding Paychecks Legal?

Understandably, you might still be concerned whether employers can hold your first paycheck. The truth is that it is illegal for employers to deliberately hold employee paychecks.

Employers should consult with their attorneys to check whether their existing employment contracts comply with or violate existing labor laws or state-specific wage regulations.

They must also make the necessary changes to their existing policies or employee handbook in case they see discrepancies or possible breaches in their legal obligations.

It may sound confusing, but think of it this way—since it is illegal for employers or jobs to hold your first paycheck, then technically, your first paycheck is not withheld.

Rather, your employer simply delayed the preparation and disbursement of your hard-earned money due to unforeseen errors and sudden adjustments that had to be made.

Conversely, employers must discuss their policies when it comes to processing and releasing paychecks to their new hires at the start of their employment.

By explaining their payroll practices, employers effectively clarify any possible misunderstanding with their employees should they not receive their paycheck on the expected date.

How Long Should You Wait for Your First Paycheck?

The time it takes before you receive your first paycheck is usually based on your employer’s preferred payroll cycle.

As such, if you are paid monthly, then you may have to wait for an entire month before the next pay period begins, and your paycheck is included in the payroll calculation.

Typically, employers or jobs hold first paychecks for a maximum of four weeks. In some instances, the employer also explains the duration at which new hires must wait for their first paycheck in the employment contract.

How Paystub.org Can Help

Employers who encounter payroll errors when processing the paychecks of both their experienced and newly hired employees can greatly benefit from using Paystub.org’s pay stub generator.

At times, employers encounter payroll processing mistakes because they are stuck using inefficient and outdated practices, such as manually preparing and calculating each worker’s pay stub and salary.

With our pay stub generator, employers can generate several pay stubs in minutes. We offer a selection of pay stub templates complete with all the important information needed in a regular pay stub.

What’s more, our generator also has a built-in calculator for easier calculation of employee salaries and deductions. Not only will employers save time and energy, but they can also potentially reduce instances of withholding or delaying paychecks.

What to do if You Don’t Receive Your Paycheck

Now, what if you don’t receive your paycheck at all?

If you’ve already confronted your employer and they still refuse to release your salary without a proper explanation, you can file a complaint with the Department of Labor’s Wage and Hour Division.

You can also seek legal advice from an employment law attorney. Doing so lets you explore the possible claims that you can file and the penalties that your employer may be subject to face following their violation.

Taking time to learn about the applicable labor and paycheck requirements in your state will also help you get a better idea of the scope of your rights as an employee.

Final Thoughts

To sum up, there is not a single answer to the question, “Why do jobs hold your first paycheck?” since it may be based on several factors, such as an employer’s existing payroll practices, preferred payroll cycle, and even the worker’s employment status.

Regardless of your employer’s reasoning for withholding your first paycheck, it is crucial for them to communicate why they may not release your salary on time.

All in all, you must keep in mind that, as an employee, you have the right to demand access to your paychecks, especially if you dutifully met the required work hours and completed the responsibilities specified in your work contract.

Why do Jobs Hold Your First Paycheck FAQ

#1. Why didn’t I get my first paycheck?

The reason why you did not get your first paycheck may be that your bank account is new, and the bank put a hold on depositing or transferring your salary.

It is also possible that your earnings did not make it to the cutoff for the pay period when you started working for the company.

Another possible reason is that your employer may be observing your efficiency and fitness for the job and wants to ensure you complete the probationary period of your employment before you can receive your paycheck.

#2. How do pay periods affect my paycheck?

Your pay periods affect your paycheck by dictating the number of days or weeks it takes before you can receive your salary. Employees who are paid biweekly should expect to wait two weeks for their next paycheck.

On the other hand, employees compensated monthly will have to wait for four weeks before they receive their funds.

#3. How does salary work if you start mid-month?

Starting work mid-month means your salary will be prorated, or your earnings will be included in the pay period succeeding the pay cycle that covers the date when your employment commenced.

It is important to note that the probability of receiving your paycheck on the expected pay date will depend on your employer’s policies in handling the paychecks of new employees.