Paychecks

Value Florida · March 2003

We operate stores in Florida, Georgia and Tennessee. Currently we pay our employees via Direct Deposit or Cash Pay Card (similar to a debit card). We do not issue live checks. The Cash Pay Card is provided by our lead bank and allows employees to access their funds (weekly pay) at no cost on a one time access basis. There is a charge by the bank if there is more than one access per week (using the Cash Pay Card).

We have changed lead banks, and our new bank charges a fee to access funds ($2.50 per transaction). While we have had only one complaint, we are not sure of the legal issues surrounding our requiring everyone to either use Direct Deposit or the Cash Pay Card since there is now a charge for the use of the Cash Pay Card. Approximately 65 of our 400 employees use the Cash Pay Card and now must pay a fee of $2.50 to access their payroll funds each week. The remaining employees make use of Direct Deposit.

Does anyone operating in Florida, Georgia and Tennessee have any experience in this arena? Remember, our goal is to eliminate live checks (issuing only paid vouchers that provide the data regarding direct deposits to a checking account or a cash pay account).

Thanks for your input.

Value Florida

Brad Forrister · March 2003

From a cursory look at the law, I think you have a problem in Florida and Georgia.

Florida 532.01 says payment in an "order, check, draft, note, memorandum, or other acknowledgment of indebtedness ... must be negotiable and payable in cash, on demand, without discount..." I think an employee could make a good case that a $2.50 fee at the bank to get the employee's money out amounts to a "discount." A separate statute allows direct deposit, but only with the employee's consent.

Georgia law, Sec. 34-7-2, requires payment "(1) by lawful money of the United States, (2) by check, or (3) with the consent of the employee, by authorization of credit transfer to his account with a bank, trust company, or other financial institution...." I don't think the cards are any of those things.

Brad Forrister
Director of Publishing
M. Lee Smith Publishers

jimlegal · March 2003

Without reserching the issue, my first thoughts are that you "cannot" place the employee in a position where they have to pay or incur a charge to receive their pay. The situation as you described sounds like the employee is required to pay or incur a charge to obtain their pay, which opens the door to litigation which costs would far exceed the costs of writing checks. That's my two cents... Hope you find a good solution.

Pork · March 2003

Since the company set the system up, you should have negotiated the best price for the service and then the company should pay for the 1st access, additional entrys into the account should or could have been paid by the employee and I do not believe that would have been a problem, as long as you had previously educated the ee and had it in writing that he/she understood. I bet you could have cut a deal with Wal-Mart for a cash card, as a payroll card and it would not cost the employee a cent! Wal-Mart is located in every state. I think I'll just go there and see how fast they would jump on the idea! Pork

Value Florida · March 2003

Thanks for the input about Walmart. I missed that....I did not know they offered cash cards.

Paychecks

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