Arkansas allows employees to opt-out of direct deposit with a written statement. And if the state does not have laws on direct deposit, federal law applies. In some states that allow employers to require direct deposit, the rules are very specific. Read on to find out. Granting such consent cannot be … 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. I received a letter stating that if I do not opt in to direct deposit by Dec. 4, my commission will be help until I do. As I bank with Bank of America, having direct deposit actually saves me from fees - BOA charges me to 'cash' a check even if its a payroll check drawn from their bank. Be sure to get professional advice on the current rules in your jurisdiction before implementing a policy at your business. Now, although employers still may not mandate direct deposit for all employees, they can require their employees to accept either direct deposit or to receive their pay on a payroll debit card if certain notices and protections are provided. An employer must pay each of its employees his/her wages in a form that s/he may readily convert into cash (without the need of a personal bank account), unless an employee volunteers to be paid by direct deposit in an account at a bank or financial institution of his/her choice. Read on to find out. This opinion letter overturns a former ruling, that Oklahoma employers could not require payment by direct deposit. But you may be surprised to learn that, according to the NACHA survey, 64 percent of direct deposit users “utilize the service because their employer encourages or requires it.” Further, 37 percent of those who don’t use the service say it’s because their employers do not offer it. To respond to this concern, you’ll want to glance at federal and state direct deposit guidelines. Can an employer in PA make direct deposit mandatory? Readers should independently verify all information before applying it to a particular fact situation, and should independently determine the impact of any particular practice. Under federal law, employers can require employees to receive their wages via direct deposit.However, employers must meet the federal requirements for direct deposit.You can make direct deposit mandatory if you do ONE of the following: Let the employee choose the bank to access their direct deposit. Depending on state laws, employers can require their employees to receive payments via direct deposit. My notes on this are not current. A good rule of thumb is to require written authorization from the employee, even if state law doesn’t say to. 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. Clearly, direct deposit is on the rise. Suite 200 Employers in New York have the option of paying wages to employees by one of four methods: cash, check, direct deposit or debit card. In fact, receiving direct deposit can be used as a prerequisite for hiring in many of states provided you comply with the following requirements: You don’t require employees to use a specific bank. And if the state does not have laws on direct deposit, federal law applies. Be sure to get professional advice on the current rules in your jurisdiction before implementing a policy at your business. They told me it doesn't matter- I have to get one. A good rule of thumb is to require written authorization from the employee, even if state law doesn’t say to. This article is intended to provide readers with general information on human resources matters. All efforts have been made to assure the accuracy of the information. I was told by my employer that Massachusetts employees need to have direct deposit for their wages. How To Use Videos for Benefits Communications. A recent opinion letter issued by the Oklahoma Attorney General allows employers to require wage payment by direct deposit but not by payroll debit card. In some states, an employer can make direct deposit mandatory, provided certain stipulations are met. OSHA Inspections and Penalties: What You Need to Know, 7 HR mistakes small businesses and startups must avoid, Advice on Medical Marijuana and the Workplace, Five Steps for Converting an Hourly Employee to Salary, 6465 College Park Sq. An employer (including a financial institution) may not require its employees to receive their salary by direct deposit to any particular institution. 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. However, for compliance with provisions of the Labor Law governing payment of wages, an employer should observe the following guidelines relating to direct deposit of wages in a bank or financial institution. If an employer chooses to institute a direct deposit pay system that is available at the option of the employee, it is immaterial whether or not there are fees associated with obtaining the wages. An employer may require direct deposit if employees are allowed to choose the bank that will receive the direct deposit. They allow employers to require direct deposit only if they pay at least $250,000 in payroll taxes to the state. 0 comments You can determine your state’s stance on direct deposit by examining its wage payment statutes, which may also require that you give employees a pay stub each time they are paid — whether by direct deposit, check, cash or payroll card. 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. (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. Browse related questions. Use the form to tell us a little bit about your business, We’ll build a program that works for your organization. While While Indiana statutes do not address whether an employer may require employees to accept Yes, in some states. 06-03-2011, 03:11 PM. There are no Washington laws restricting an employer from mandating direct deposit. Employment. No discussion, no verbal communication at all. Under federal legislation, companies can … Click to see full answer. Tags: None. The letter was slid under my plexiglass window on Nov. 30 by the Township Manager. Is it legal to force employees to receive pay via direct deposit to a bank? In many states — including California, New York, New Jersey, Florida, Vermont and Illinois — employers must obtain written permission from employees in order to pay them by direct deposit. In the prior year, the employer’s annual federal payroll tax deposits amounted to at least $250,000, and; At least two-thirds of the employer’s workers are being paid by direct deposit. 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. More than 10 years ago, I was able to receive regular checks mailed to my home address. There are many benefits of direct deposit for employees. In 2016, the National Automated Clearing House Association (NACHA) reported that 82% of U.S. employees are paid by direct deposit, jumping from 74% in 2011. In the prior year, the employer’s annual federal payroll tax deposits amounted to at least $250,000, and; At least two-thirds of the employer’s workers are being paid by direct deposit. Lawyer's Assistant: Was this discussed with a manager or HR? Can employers make … Since employees must have a bank account to use direct deposit, this might not be the best option if you have many unbanked employees. In some states, an employer can make direct deposit mandatory, provided certain stipulations are met. The Electronic Fund Transfer Act (EFTA) protects companies and workers whom utilize features like direct deposit. You can determine your state’s stance on direct deposit by examining its wage payment statutes, which may also require that you give employees a pay stub each time they are paid — whether by direct deposit, check, cash or payroll card. The article does not constitute, and should not be treated as professional advice regarding the use of any particular practice. Federal Law on Direct Deposit 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. HelloCustomer According to Georgia Code - Labor and Industrial Relations - Title 34, Section 34-7-2, a company can offer employees direct deposit and proceed with that process as long as the employee consents/agrees.My research found no Georgia law that would allow a company to require an employee to participate in 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. Or with a lawyer? Direct Deposit. In 2016, the National Automated Clearing House Association (NACHA) reported that 82 percent of U.S. employees are paid by direct deposit, jumping from 74 percent in 2011. Payroll. But can you? Alternatively, if at least two-thirds of company employees agree to accept payroll direct deposits. 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