Can Direct Deposit Be Mandatory?

System · August 2003

We're in N.C. Can we make direct deposit mandatory for all employees? We can deposit the payroll into existing accounts, but we are also able to open no-charge accounts from here for the employees. We have had so many problems with lost checks, or people claiming their check is lost, getting a replacement and cashing the "lost" one, people getting robbed, or bad mailing addresses. I want this mandatory for everyone but am getting a LOT of resistance from management. Any thoughts?

cthr · August 2003

Yes, direct deposit can be mandatory in NC.

england1 · August 2003

I'm in Wisconsin and we made it mandatory a few years back. I believe your company can do whatever it wishes. I know we have saved alot of money going this route.

cthr · August 2003

>I'm in Wisconsin and we made it mandatory a few years back. I believe
>your company can do whatever it wishes. I know we have saved alot of
>money going this route.

Whether or not you can make direct deposit mandatory is a matter of state law, and then some states require in state bank, ee pick bank, etc. It is best to check your state law before making mandatory.

Wisconsin can be mandatory, but it must be an in state bank and the ee must incur no cost.

Don D · August 2003

Although it is legal in MS, I'm told there are many people who do not have and cannot get a bank account. I've been told that people who have bounced several checks cannot open accounts. I also hear that thousands of Mexican workers, even though they may be legal here, are having tough times opening accounts and don't even want one to begin with in most cases. So, what's your plan for those employees who tell you they do not have an open account and don't want one or that the bank will turn them down?

Pork · August 2003

"Dandy Don" is right on again, but let me remind all that it is the responsibility of the employer to make sure every one receives a pay-check, voucher of the pay, or cash payment for time served + benefits due. We highly encouraged all to go direct deposit: about 40% are on direct deposit, about 20% get their check through the mail, and about 10% pick-up their checks each week from my assistant who does payroll.

We have 3 options and all three meet the standard of getting the paycheck to the ee during the next 40 hours after the work week has closed which is every Saturday.

Our Hispanic employees who are here legally, three of them have checking accounts and are on the direct deposit system. The rest can not get one, and even have some difficulty getting them cashed. They use the Cash Advance businesses and grocery stores who accept the payroll check for the purchase of food. Regardless we meet the statue of getting the ee his/her money owed for service rendered on our behalf.

For these reasons, we did not make it mandatory, and I believe you might have difficulty making me have a direct deposit system unless the company is willing to suffer the cost of an account established on the behalf of the ee.

Personal pick-up and a direct deposit system might work for those of you without remote locations. The US MAIL system also works for us! We have not lost a check, so far, and "knock on wood" to keep that trend.

My computer has been receiving the "super big worm", but our AVF system has detected the incoming bug and deletes the attachments, got to run for not and delete the mail. About 34 e-mails messages per 15 minutes period of time since 7:00 AM from someone out there. OOPS here comes 2 more!!!!

PORK

psrcello · August 2003

I used to work for a company that constructed antenna towers all over the country. The tower crews operated out of field offices, but many didn't have permanent mailing addresses (they lived in motor homes that took them from one site to another).

We tried to make direct deposit mandatory, but we had difficulties, as Don said, with employees who were unable to open a bank account because of past overdrafts or other issues.

Maybe in your situation, with being able to provide employees with no-charge accounts, you can circumvent this problem. It sounds as if it would make everybody's lives easier.

LindaS · August 2003

I'm in WI and a former employer had mandatory direct deposit for it's employees. We offered employees the option of going into an existing account or opening a checking account at a specific bank. If they chose the option of having us open an account, we had them complete the necessary forms at our office and I physically went to the bank to open the account and get their temporary checks. We had an agreement with the bank that there wouldn't be any charge for the account, no minimum balance, and no charge for the checks (unless they wanted specialized checks). If the employees "bounced" checks, it was their responsibility to deal with the bank.

I had many young employees who had never had a bank account and really appreciated this extra "perk". They also liked not having to come in to pick up their check if they were off on a payday - they could just call to get their deposit amount.

Balloonman · August 2003

We do not mandate it, but mail your check if you do not have direct deposit. Only takes the post office losing your check once, and they sign up. You can do direct deposit into a savings account also. Then they could use an atm to withdraw the money if they do not want checking. Just a thought.
My $0.02 worth.
DJ The Balloonman

Eliant · August 2003

I'm in California,
We can't force our employes for direct deposit. However we have come up with the e-card. It's like an ATM card. They can go to any bank and withdraw their money, or they can use it at grocery stores, gas stations etc. This has worked wonders for all types of employees. We have a lot of hispanic employees that do not like the idea of having their money in the bank, or those husbands/wife that do not want their partners to know how much money they are making, or for that matter people who have problems with bouncing checks. (Savings account are fine except that banks in California charge you a fee if you withdraw $$ from your account more than once)
just an idea.

System · August 2003

We signed up through Bank of America for their CashPay program. We can open the account for the employee, make it checking or savings, and there is no charge to the employee ever unless they need to replace their ATM card. There is even customer service in Spanish. Don, you made a good point about the Hispanics, but this is the portion of the crew with which we have the most difficulty. They don't want to open an account a lot of the time, true, but there is so much lost productivity between me and payroll that this seems like a good idea. There's a lot of theft, incorrect addresses and frequent moves, and a lot of checks go missing. Another question for all of you: do any of you have a "Valid Through" or "Void After" date on your paychecks?

pmrPA · August 2003

In Pennsylvania direct deposit cannot be made mandatory. In answer to your second question, we put a "Void in 90 Days" notation on all paychecks. However, our solicitor informed us that an employee may cash a paycheck up to one year after the date of issue. Also, after three years, we must turn in any unclaimed paycheck amounts (with names & addresses) to the state's "Unclaimed Property" division of the Pa. Department of Revenue. You may want to check to see if this is a requirement in your state.

hrbanker · August 2003

Up until a few years ago, we required all employees to have direct deposit. No problems opening accounts since we're a bank, but had some employees that lost their checking priviledge for bouncing checks. We paid them into a savings account instead. Then Ohio changed the laws and we can no longer require direct deposit. We make it an option, giving free checking, free checks and debit cards. I have about 10% of the workforce that still want the check in hand on payday. When a check is 'lost', we put a stop-payment on it. ...If someone got robbed of their pay, you would think they would request direct deposit!

Can Direct Deposit Be Mandatory?

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