[roboy]

Q from outside the US: why is capital needed for payroll mid month? Are there some automatic insolvency processes if it is missed by a day? Why do the companies fall apart if there is just a few days of payment delay? (I mean it is obviously a shit situation, and having to tell the team payment might take a few days more than usual is bad, I am just surprised how 2 days of no-cash seem to wreak havoc…)

[rdl]

Most companies in the US do payroll on either a 2 week cycle (which sucks because some months you do 3 and some times you do 2), or 1st and 15th (or otherwise twice a month). March 15 is a very common payroll date.

They're batch processes, done by dedicated payroll firms, since there are lots of tax/other obligations as well.

Missing payroll by even one day causes 1) lots of drama with employees 2) starts some legal problems 3) potentially screws up people's healthcare/other benefits 4) potentially causes tax problems. Some of this is with the state, some federal.

Payroll is basically the second to last thing you want to miss (certain government obligations above it, since they have liability for the officers directly).

(This is mostly because employers are presumed to have a lot of power vs. employees, and generally do, and there have been a lot of historical abuses of companies paying people slowly, withholding wages, etc., which puts the employees in a position of "do I quit and guarantee I don't get paid, or do I work a little bit more and maybe collect what I'm owed" and then companies continuing to abuse it...)

[physicsguy]

Quite interesting, here in the U.K. it’s generally monthly payroll, usually towards the end of the month, something like closest working day after the 25th is common

[ghaff]

Some people like the "extra" checks of a 2 week cycle. Others prefer twice monthly cycles because it better aligns with expenses like mortgages and utilities.

[moomoo11]

What’s the first thing? Can you expand on that part. Ty

[icelancer]

Wage payment delays in the state of California are severely punishable under law:

https://www.ottingerlaw.com/blog/wages-hours/employer-not-pa...

[phphphphp]

“If you receive a late paycheck, California Labor Code 210 requires employers to pay a penalty of $100 for an initial violation.”

Severely is overselling it.

[choppaface]

Except Musk has established precedent at Twitter that you can just fire employees for cause.

[dboreham]

a) most employees are paid every 2 weeks and b) there are laws that say an employer is committing a crime if wages are not paid on time. So any properly run business takes great care to ensure that adequate cash is on hand to cover wage commitments (not just the money due to employees but also taxes due to state and federal governments). When thar cash goes up in SVB smoke, that's a big and immediate problem. You could in theory be sued or even go to jail.

[dragonwriter]

> there are laws that say an employer is committing a crime if wages are not paid on time.

Unless it is at least willful, its probably not a crime. It is, however, generally illegal and carries a civil cost even when not criminal.

[netdur]

I don't know but... some companies used to pay me biweekly, every odd monday, then there is company used to paid me once end of month and another paid once per month but in middle of month, with limited accounting resources they pay bills twice, first of month for outside and middle of month for salaries and stuff

[loeg]

> Q from outside the US: why is capital needed for payroll mid month?

The US largely does payroll biweekly (every two weeks). Sometimes weekly, although usually not in tech. It isn't like Germany or whatever where payroll is only once a month.

[dragonwriter]

> The US largely does payroll biweekly (every two weeks).

Weekly, biweekly, monthly, and semimonthly are all common; In most states, there are rules setting minimum frequency (and sometimes regulating on what days as well as frequency), and they may vary by industry and job type. E.g., for California: https://www.dir.ca.gov/dlse/faq_paydays.htm