It's that time of year again when the holiday season is nearing. The time of year when there's a flurry of gift-giving events, marketing blitzes, sales discounts, holiday parties, and activities that begin just after Halloween and continue to gain traction until the end of the year.
While the holiday season is intended to offer sentiments of gratitude and joy, it can also bring forth a lot of seasonal stress for many businesses, as the demands of the business combined with holiday activities can be overwhelming.
It’s never too early for businesses to start thinking about the holiday season, and how that can impact certain tasks. A great place to start is knowing when the Federal Reserve and most banks are observing, so you can plan important administrative tasks, like payroll, around these holidays.
Be sure to mark your calendars as we provide a list below of the remainder of federal holidays in 2021 and when the Federal Reserve and most banks are observing:
Federal Holidays until the end of 2021
Veterans Day - Thursday, Nov. 11, 2021
Thanksgiving Day - Thursday, Nov. 25, 2021
Christmas Day - Saturday, Dec. 25, 2021
Note: Holidays that fall on a weekend follow a different structure. Per the Federal Reserve, “For holidays falling on Saturday, Federal Reserve Banks and Branches will be open the preceding Friday; however, the Board of Governors will be closed. For holidays falling on Sunday, all Federal Reserve offices will be closed the following Monday.”
Federal Holidays in 2022.
New Year's Day - Saturday, Jan. 1, 2022
Martin Luther King, Jr. Day - Monday, Jan. 17, 2022
Washington’s Birthday - Monday, Feb. 15, 2022
Memorial Day - Monday, May 30, 2022
Independence Day - Monday, July 4, 2022
Labor Day - Monday, Sept. 5, 2022
Columbus Day - Monday, Oct. 10, 2022
Veterans Day - Friday, Nov. 11, 2022
Thanksgiving Day - Thursday, Nov. 24, 2022
Christmas Day - Sunday, Dec. 25, 2022
Now that you’re aware of the upcoming observed holidays, below are some tips and best practices for handling holiday pay to make sure your payroll doesn’t put a damper on everyone’s holiday spirit.
The following is an excerpt from a previous PrimePay Blog.
Today, businesses and even some banks are a lot more lenient when it comes to holiday closing and time off. Some banks may actually remain open on holidays. However, it is important to understand that even if a bank may be open if the Federal Reserve is closed, no money is being moved.
It’s also important to consider the schedule of the automated clearing house (ACH). The ACH is an electronic financial transaction network in the U.S. that is used for business-to-business transactions, direct deposit, utility purchases, social security, e-commerce payments, and tax payments.
The two national ACH providers are reserve banks and the electronic payments network (EPN), which means they rely on each entity to process your deposits. Being that the ACH follows the same rules as the Federal Reserve, your direct deposit cannot be processed on holidays.
Tips for handling holiday pay.
If you decide to pay your employees the day before the holiday, it’s a good idea to continue to do the same each year.
Make sure that your employees know if they are getting paid for a federal holiday or not. Communication is key.
Distribute a Schedule
Make a schedule at the beginning of the year to ensure that the year goes as planned. Be sure to share it with employees so everyone knows when they will be paid throughout the year.
If you decide to pay your employees before Thanksgiving Day, here is an example of how you could process your payroll for 2021.
If you normally process on Wednesday or Thursday for a check date of Friday, plan to process one day earlier. If your check date falls on Thursday, November 25, 2021, plan to change it to either Wednesday, November 24, 2021, or Friday, November 26, 2021.
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