How and when did it become the norm for businesses to pay their employees every two weeks, rather than, for example, on a daily or even seasonal basis? Is this simply a way for bosses to receive a 0% interest loan from labor, leaving workers at the mercy of payday lenders in times of financial stress? Or are there other practical reasons for a bi-weekly payroll?  On this week’s edition of The Breakdown, DC Editor Christopher Hayes and labor historian Nelson Lichtenstein explore the history and logic behind how payroll periods have been determined.

How and when did it become the norm for businesses to pay their employees every two weeks, rather than, for example, on a daily or even seasonal basis? Is this simply a way for bosses to receive a 0% interest loan from labor, leaving workers at the mercy of payday lenders in times of financial stress? Or are there other practical reasons for a bi-weekly payroll?  On this week’s edition of The Breakdown, DC Editor Christopher Hayes and labor historian Nelson Lichtenstein explore the history and logic behind payroll periods and how they have been determined.

Resources

Elaine Maag’s Forbes article about how Obama’s 2011 payroll tax cut might be understood as an individual worker credit.
An explanation of the distinction between a “pay period” and an “earnings period.”
Consumer Reports article highlighting how the usurious rates of interest charged by many payday lenders can impact workers.
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