Banking holidays can affect your payroll if the holiday falls on payday for your company. The banks are closed, and direct deposits will not be transferred to employees' bank accounts on those specific holidays. Not every banking holiday will fall on your payday, but if it does it can be easy to plan for, and make the necessary changes so your employees get paid in a timely manner. Planning ahead means knowing when the banking holidays are, below is a guide for 2022-2023.
|Federal Banking Holidays||2022||2023|
New Year's Day
|Saturday, Jan. 1*||Monday, Jan. 2|
|Martin Luther King, Jr. Day||Monday, Jan. 17||
Monday, Jan. 16
|Washington's Birthday||Monday, Feb. 21||Monday, Feb.|
|Memorial Day||Monday, May 30||
Monday, May 29
|Juneteenth||Sunday, June 19**||Monday, June 19|
|Independence Day||Monday, July 4||Tuesday, Jul. 4|
|Labor Day||Monday, Sept. 5||Monday, Sept. 4|
|Columbus Day||Monday, Oct. 10||Monday, Oct. 9th|
Friday, Nov. 11
|Saturday, Nov 11*|
|Thanksgiving Day||Thursday, Nov. 24||Thursday, Nov. 23|
|Christmas Day||Sunday, Dec. 25**||Monday, Dec. 25|
*Saturday- the Federal Reserve Banks are open but the Board of Governors is closed on December, 2021, November 10, 2023.
**Sunday-the Federal Reserve Banks and the Board of Governors are closed on June 20, 2022, December 26, 2022, and January 2, 2023.
How to handle bank holidays and payroll
There are a few ways to handle paying your employees during a banking holiday. If employees are paid by check, they are minimally affected by the banking holiday. If an employee receives a check you might take the bank closure into consideration because the employee would not be able to walk into the bank and cash the check. But now, with mobile check deposits and deposit capability via ATM, both are available during banking holidays which allow employees to deposit checks.
Many businesses pay their employees via direct deposit, and this is when the business needs to take action due to banking holidays. The options are to move the actual pay date to the day prior to the banking holiday, or the first day following the banking holiday. With either option, businesses should have a formal written policy provided to employees, ideally in the company handbook, that clearly describes how employees are paid when a banking holiday falls on payday. Check the calendar and make sure you notate at the beginning of a calendar year when banking holidays fall so they don’t sneak up on you.