Direct Deposit

We would like to require all of our employees to use direct deposit for payroll purposes.  We are in Texas.  Can I require them to use direct deposit? 

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  • Thanks for your post. The answer to your question is yes, provided the employees have accounts at a financial institution that qualifies for electronic transfers, and the employer provides advance notice to the employees in writing. Detailed information can be found on HR.BLR.com under the topic "Paychecks."  Here's the information from that analysis:

    Wages may be paid by cash or check, electronic fund transfer, in kind, or in another form (TX Labor Code Sec. 61.016). Employers that pay their employees by check must provide for check cashing, without charge, at a bank or elsewhere.

    Direct deposit. An employer may choose to pay wages to an employee who maintains an account at a financial institution that qualifies for electronic funds transfer through a direct deposit plan. An employer who desires to use direct deposit must:

    • Notify each affected employee in writing at least 60 days before the date on which the direct deposit payroll system is scheduled to begin that the employer is adopting a direct deposit payroll system; and

    • Obtain from the employee any information required by the employee's financial institution that is necessary to implement the electronic fund transfer (TX Labor Code Sec. 61.017).

    Hope this helps!

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