can employers make direct deposit mandatory

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Since employees must have a bank account to use direct deposit, this might not be the best option if you have many unbanked employees. Virginia Beach, VA 23464. You can quickly transfer the paycheck to the employee’s bank account, which means your employees have instant access on payday. Of course, this is just a summary of complex state rules, which may contain additional provisions and exceptions, and also which can change frequently. There is no requirement that an employer obtain a permit from the Department of Labor before instituting a direct deposit of wages system. I was told by my employer that Massachusetts employees need to have direct deposit for their wages. An employer may require direct deposit of salary by electronic means if employees are allowed to choose the institution that will receive the direct deposit. The Society of Human Resources Management has a useful compilation of state laws on wage payments and direct deposit available here. The first statistic tells us that some employers actually require direct deposit. Join Date: Jun 2006; Posts: 12665; Share Tweet #2. Employers in New York have the option of paying wages to employees by one of four methods: cash, check, direct deposit or debit card. How To Use Videos for Benefits Communications. Mandatory Direct Deposit of Pay Effective December 31, 2015, the Pottsville Area School District is requiring all employees who have received their compensation previously through a paycheck to convert to direct deposit. They told me it doesn't matter- I have to get one. Alternatively, employers can choose the bank that employees must use for direct deposit. However, even these states have some restrictions you need to … Or with a lawyer? There are many benefits of direct deposit for employees. Direct Deposit. For instance, employers in Kansas, Indiana, Texas, Missouri and South Carolina can require employees to accept direct deposit, but the employer must provide another payment method — such as payroll card, cash or check — to employees who do not have a bank account. Washington law simply states that if payments are made via direct deposit, the payment must be made available on payday, and that there cannot be any charge to the employee to set up the direct deposit process. 06-03-2011, 03:11 PM. The Electronic Fund Transfer Act (EFTA), also known as federal Regulation E, permits employers to make direct deposit mandatory, as long as the employee is able to choose the bank that his or her wages will be deposited into. In some states that allow employers to require direct deposit, the rules are very specific. For instance, employers in Kansas, Indiana, Texas, Missouri and South Carolina can require employees to accept direct deposit, but the employer must provide another payment method — such as payroll card, cash or check — to employees who do not have a bank account. This opinion letter overturns a former ruling, that Oklahoma employers could not require payment by direct deposit. 2 attorney … Indiana Employers may make direct deposit mandatory; however, no law directly addresses this. An employer may require direct deposit if employees are allowed to choose the bank that will receive the direct deposit. The employee can then decide whether to go with direct deposit at the bank of the employer’s choosing or with the other means of payment. In this manner, can direct deposit be mandatory? If you are seeking human resources advice, you are encouraged to consult a human resources professional. Can an employer in PA make direct deposit mandatory? Is this information accurate? Use the form to tell us a little bit about your business, We’ll build a program that works for your organization. The Upside of Integrating Timekeeping, Payroll and Accounting, Compliance Requirements for a Remote Workforce. (b) A statement indicating that, except for an employee currently paid by direct deposit or any employee of an employer paying wages by payroll debit card to 1 or more of its employees on January 1, 2005, failure to return the form within 30 days with the account information necessary to implement direct deposit will be presumed to indicate consent to receiving wages through a payroll debit card. Be sure to get professional advice on the current rules in your jurisdiction before implementing a policy at your business. The Electronic Fund Transfer Act (EFTA), also known as federal Regulation E, permits employers to make direct deposit mandatory, as long as the employee is able to choose the bank that his or her wages will be deposited into. Readers should independently verify all information before applying it to a particular fact situation, and should independently determine the impact of any particular practice. Of course, this is just a summary of complex state rules, which may contain additional provisions and exceptions, and also which can change frequently. The Electronic Fund Transfer Act (EFTA), also known as federal Regulation E, permits employers to make direct deposit mandatory, as long as the employee is able to choose the bank that his or her wages will be deposited into. Permit from the Department of Labor before instituting a direct deposit mandatory ; however no. You ’ ll want to glance at federal and state direct deposit must for! Of human resources matters that allow employers to require direct deposit systems are under... Quickly Transfer the paycheck to the employee ’ s bank account at least two-thirds of company employees to... 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