Direct Deposit

dls · May 2007

What are the issues? Can the employer require direct deposit?

hr92175 · May 2007

I know tne company I work for requires it

dixied · May 2007

Check with your state DOL. Laws vary by state. NE does not allow an employer to require direct deposit.

joannie · May 2007

Just went through this last August. In Oklahoma, you can require new employees to be paid through direct deposit. Existing employees have the right to continue receiving paychecks if they desire. We have been very successful with our program. Before requiring, we arranged group banking benefits at the company's bank and they agreed to guarantee to open an account for any of our employees. Employees still must qualify for overdraft protection, etc., but they are guaranteed a no-frills checking account. I have not lost a potential employee due to the direct deposit requirement.

ACU Frank · May 2007

We require it. I don't like it, but we do.

Dutch2 · May 2007

We can require it, and we do. However, we cannot tell the ee's which bank to use. They must have the freedom to use which ever bank/financial institution they want.
Also,it does not have to be a checking account, it can be a savings account and this will get you around the ee's having to qualify for overdraft protection, etc. at the banks.

NaeNae55 · May 2007

Our Kansas SHRM worked hard this year working on bill 2316. We got it passed and signed by the governor. It becomes effective 7/1/07. Woo-hoo!!!

Employers can now require electronic deposit. However, the employee does not have to have a checking account. If they don't, we can give them a debit card. We deposit money in the account that the card draws from. The employee can make at least one free withdrawal (up to the company and the bank agreement if more than one free withdrawals will be allowed) per pay period. Employees who don't have a checking account no longer have to pay a fee to cash their checks.

I am the Legislative chair for our chapter, so I was slightly involved. Needless to say, we are thrilled. Employees are not forced to have checking accounts, they are saved the fees for check cashing, and we no longer have to worry about issuing checks. If the employee loses the card, we can replace it for a nominal fee and simply transfer the funds from the old account to the new one.

njjel · May 2007

To the best of my knowledge, in the state of New Jersey you may NOT require ee's to do direct deposit. Again, check your state regs.

marc · May 2007

I looked at the FAQ's in the Oklahoma Labor Department.

One of those says current employer cannot require direct deposit, unless it is for new employees.

I am sure there is more info buried in the site, but thought you could reseach from this point.

Direct Deposit

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