Debit Cards/Direct Deposit
qsausagelm
34 Posts
Can a company require that EE’s accept either debit cards or direct deposit as the only means of payment for their wages and salaries? (No actual paycheck) I didn't get any response to this question when it was posted in the "Wage & Hour” and boy howdy do I need some learned help.
Thanks
Thanks
Comments
Anne Williams
Attorney Editor
M. Lee Smith Publishers, LLC
An employer must pay wages by the following means:
¨ Delivering them to the employee at the employee’s regular place of employment during regular employment hours.
¨ Delivering them to the employee at a time and place agreed on by the employer and employee.
¨ Sending them to the employee by registered mail, to be received by the employee not later than the regular payday.
¨ Delivering them to a person designated by the employee in writing.
¨ Delivering them to the employee by any reasonable means authorized by the employee in writing.
¨ Direct deposit plan.
An employer may pay wages to an employee with an account at a financial institution that qualifies for and utilizes an electronic funds transfer through a direct deposit plan. Employers who pay through a direct deposit plan must do the following:
¨ Notify each affected employee in writing, at least 60 days before the date when the direct deposit payroll system is scheduled to begin, that the employer is adopting a direct deposit payroll system.
¨ Obtain from the employee any information required by the employee’s financial institution that would be necessary to implement the electronic funds transfer.
From an intuitive perspective, if they agree in writing to your debit card proposal you are probably home free. I anticipate some resistance though, because debit cards are harder to use than cash. And if you are at an ATM, there are limits to the usage, such as $20 increments and some single transaction limits. If the card usage is too much of a hassle, you are going to swim upstream getting approval.
In that case, I would guess you fall back on the other payment possibilites outlined by SMace.
The beauty of this set-up is that checks are no longer lost or stolen, and we had some employees who would hoard their checks and have as many as ten uncashed checks in their possession! That made accounting a mess, and now the daily calls I received about lost, late or stolen checks have stopped. This card can be used like any check card at gas stations, stores, etc. If the ee is terminated or quits, the account belongs to the ee, so we don't have to do anything in that regard.
We can pay our ees in any manner we choose as long as they are paid on time. I am all for mandated direct deposit. I can fax a brochure if anyone wants to see it.
Linda
[email]linda@insulatingservices.com[/email]
Otherwise, if your state law forces you to give a paper check, make sure the employee knows this will be mailed to their home and they are at the mercy of the US Postal Service.