Direct Deposit Payroll Checks

Miriam George

We anticipate going to a direct deposit system on our payroll around the 1st of the year 2002. Many employees are complaining and seem resistant to the process. Can any of you tell me how you handled the transition in your organization from standard paychecks to direct deposit?

What are the "positives" we should tell our employees to promote this?

cedupree

We made the switch in October. The most obvious positive for us was that you didn't have to come in to get your paycheck if it occurred on a day when you were on vacation or sick. Also, for the hourly employees that didn't always work on pay day, that kept them from having to make a special trip just to come in for their paycheck. We only had four hourlies that chose not to have direct deposit. We mail them their check on payday (every second Friday), which means they would get their paycheck on a Saturday and have to wait until Monday to put it in the bank. For me, this means I don't have to re-arrange my schedule to be in the office to co-sign all those paychecks. We went with SunTrust and they were very helpful in getting everything set up.

System

I think direct deposit is great. The check goes in automatically, usually the night before payday, and employees can avoid the long lines at the bank on payday!

Our bank (Amsouth) offers limited online banking for free so you can check to see how much is in your account at any given time. You can quickly check online or by phone to make sure the check was deposited before writing bills.

Our company also offers direct deposit to more than one account, so part of my paycheck goes to a savings account and the rest of it goes to a checking account. That's also very handy - the money actually makes it into the savings account if it goes automatically ... unlike when I used to have to make a special trip to the bank to transfer part to savings.

We also receive a stub in our mailbox each payday, letting us know how much was deposited in which account, how much was taken out for taxes, 401 (k), etc., and how much vacation time we have remaining. I wouldn't be as supportive of direct deposit if we didn't receive a stub on paydays detailing the transactions. Plus, it just feels plain good to see a physical piece of paper saying you got paid.

Hope these thoughts help!

jechiplock

Another benefit for us and our employees, because we overnight paychecks to several of our out-of-state locations, is that direct deposit eliminates the delays caused by occasional mail service foul-ups, inclement weather, or receiving errors at the other end.

One caution - be sure that employment separations are processed on a timely basis for any terminating employees on "autopay" (salaried) status who also have direct deposit, or you risk becoming a repossession expert!

Sally

We went to direct deposit about five years ago and everyone really likes the fact they don't have to find the time to go to the bank. We have very few employees who are not on direct deposit. The best part for the musicians in our orchestra is that they are off during the summer but 99% have elected to have their pay spread over the 24 pay periods--so with direct deposit they don't have to make a trip to the musicians union hall every pay day to pick up their check. And we don't have to scurry to have the paychecks at the union hall or concert hall by 1:00 every pay day!
Two things to be aware of--there have been a couple of times when the person keying in our payroll forgot the payday was a holiday when the banks were closed so the money didn't go in on the 15th as it was supposed to. Also, when an employee is terminating either voluntarily or involuntarily I have our payroll person take the employee off direct deposit so the employee gets his or her final paycheck handed to him or her once keys, ID badge, parking pass, etc. are turned over to me.

Theresa Gegen TX

Direct deposit is great and will make things easier on employees. They will not have to go to the bank with their paychecks (which at my old job before we got direct deposit, resulted in people having to take time off work to do so).

You may want to check your state's law to ensure that your company can mandate direct deposit. (Some states do not allow employers to force it, it must be the employee's choice).

Good Luck!

Summer 43

>Another benefit for us and our employees, because we overnight
>paychecks to several of our out-of-state locations, is that direct
>deposit eliminates the delays caused by occasional mail service
>foul-ups, inclement weather, or receiving errors at the other end.
>
>One caution - be sure that employment separations are processed on a
>timely basis for any terminating employees on "autopay" (salaried)
>status who also have direct deposit, or you risk becoming a
>repossession expert!


While we all hope the events of 9/11 never happen again, this is a good example of why direct deposit can be beneficial for your employees in remote locations. With Fed Ex, UPS, Airborne (and other overnight services we have come to rely on) completely shut down, we were in a scramble to get checks to people in remote places.

HR in Okla

Noticed you are also in Okla. I called OK DOL when our company went direct deposit. DOL said you can't mandate current employees to sign up, so we wound up with two or three hold-outs that get live checks. DOl did say that direct deposit could be required of new hires as a condition of employment, so all new people are just told "that's the way it is."

Our bank (Guaranty in OKC) provided free checking and came out to enroll everyone. I think after 6 months, most of them really like it. One thing to be aware of is the educational, socio-economic level of your work force. We had people who had never written a check and didn't know how to handle an account. Some education or support may be necessary.

I also stop direct deposit on terms who have company property issued to them.

Good luck.

gus

Several years ago we moved to DD. Our laws are the same as OK with the issue of not mandating it to current employees. However, we had great sucess as all staff but 5 took the DD option. After several months I sent memos to the non-DD staff and told them that they were one of only 5 that did not participate in DD. We then had only 2 non-DD. At the end of the year I sent them letters telling them that the cost of running extra reports, buying checks for payroll acoount and the payroll clerk time were resources better used elsewhere. I asked them to sign-up within the next month. We now have full participation in DD. I agree with the others in selling points and also have concerns for those who may have had bad experiences with bank accounts. Some may be listed with the credit bureau as bad checking risks. Offer savings accounts with ATM access for any staff with past problems. Good luck!

Rockie

Unfortunately, South Carolina will not allow employers to mandate direct deposit, but we strongly suggest it from a savings standpoint - both to the company as well as the individual. We do have DD and only a few employees get a live check. Most of this is due to the fact that they cannot qualify for a checking account due to bounced checks, etc. in the past.

Thankfully, most people can see the value in not wasting their time standing in line to cash a check.

Amyl

We began direct deposit years ago, and while there is always resistance to change, most people are now quite happy w/the convenience it offers. One thing it avoids -- a lost or delayed paycheck. We've had that occur -- a postal station misdirected our payroll mail and we had to reissue numerous live checks to livid employees. We took the opportunity to remind them that if they had direct deposit, this wouldn't have been a problem for them.