Mandatory Direct Deposit
lisam
4 Posts
I was told that direct deposit can be mandatory in PA, but can only be implemented going forward. For example, a company wants to switch to mandatory direct deposit. They can require it for all new hires going forward, but cannot force existing employees to switch even if they can choose the financial institution. Is this true? The state code does not address this anywhere, so I'm looking for somebody who has encountered this type of situation before.
Thanks!
Thanks!
Comments
In response to your question, I checked our Fifty Employment Laws in Fifty States book, which has a section on Direct Deposit laws. For Pennsylvania, our participating ECN attorneys have noted that PA state law actually doesn't explicitly allow employers to require direct deposit, but that the practice has been implicitly endorsed in one court case. That case is the Statler v. Unemployment Comp. Bd. of Review case, and can be found at [url]http://www.courts.state.pa.us/OpPosting/CWealth/out/2774CD98.pdf[/url]
In that case, an employee was denied unemployment compensation benefits for his repeated refusal to sign an agreement requiring "all current employees to make arrangements for electronic funds transfer." Though the court was hesitant to call the direct deposit/EFT agreement "reasonable," it still saw fit to deny benefits because the employee's refusal to sign or amend the agreement was unreasonable.
Holly Jones
Managing Attorney Editor
M. Lee Smith Publishers, LLC