Need more pay card alternative goodness? However, if you operate in a state with specific direct deposit laws, then you’ll need to follow them. While many states have rules limiting or regulating direct deposit of wages, Washington is not one of them. In this case, the federal Electronic Fund Transfer Act or EFTA specifically overrides some provisions of Oklahoma law that forbid wage payment by mandatory direct deposit. The materials and information included in the XpertHR service are provided for reference purposes only. Final Tips. Mandatory Direct Deposit Authorization. Mandatory direct deposit systems are permitted under certain circumstances: The employee must be able to collect his or her wages at a bank or facility in the State of Wisconsin. Federal Regulation E sets the overall rules and minimum standards an employer must follow when offering direct deposit and other types of electronic payments (e.g., paycards) to employees. 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. Direct Deposit of Wages in a Bank or Financial Institution Guidelines. The State of Kansas has a partnership with U.S. Bank to provide a U.S. Bank FOCUS paycard to employees who choose not to have their payroll directly deposited to a checking or savings account. States that Allow Required Direct Deposit. For example, there are state laws on mandatory direct deposit that you need to follow. Mandatory Direct Deposit Notification (To be signed by all new hires, and rehires on and after August 1, 2007) In accordance with the State Controller’s Policy issued July 1, 2007, as a condition of employment, a person hired or appointed to a position in a state agency on or after August 1, 2007, and who is In this case, the federal Electronic Fund Transfer Act or EFTA specifically overrides some provisions of Oklahoma law that forbid wage payment by mandatory direct deposit. In some states, an employer can make direct deposit mandatory, provided certain stipulations are met. Title 15 of the U.S. Code, Section 1693k, provides the following: § 1693k. 2. View our privacy policy, privacy policy (California), cookie policy and supported browsers. Please press Ctrl/Command + D to add a bookmark manually. Discover the power of XpertHR employment law guidance and best practice at your fingertips with a free trial. New Jersey’s direct deposit law also allows county, county college, municipality, and local school district to opt for mandatory direct deposit for all employee compensation on or after July 1, 2014. After searching the Internet for several days, I have been unable to locate a site that provides free information on this subject. 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. In addition to transfers made by ATMs, phone, and debit cards, it also governs direct deposit. Most states have adopted Regulation E's provisions into their wage payment laws. Yes. Author: Alice Gilman. Texas employers can require employees to accept direct deposit only if the employee has a bank account which provides for direct deposit, and so long as there are no fees which would reduce the employee’s pay to an amount less than the applicable minimum wage. employers may pay their employees and defining mandatory procedures for the use of direct deposit and payroll debit card payments. Employers cannot require employees to have direct deposit at a specific financial institution. Connecticut: You can’t require direct deposit in Connecticut. The law is clear that employers can require employees to authorize direct deposits. With advantages for employers like time and cost savings, greater security, and increased satisfaction thanks to the convenience and reliability of automated transfers, you may want to make direct deposit mandatory. I’ve put together this overview of the laws in place that prohibit, limit or allow employers to pay by direct deposit. Here is the citation from the Georgia Code: Every person, … Florida. Copyright © 2021 LexisNexis Risk Solutions Group. Under the EFTA, employers can require direct deposit if one of the following conditions is met: Yet even though the EFTA permits mandatory direct deposit, your state may not. TRENTON — The Assembly gave final legislative approval today to a measure that would require all state employees to be paid through direct deposit.. State Law on Direct Deposit In some states, an employer can make direct deposit mandatory, provided certain stipulations are met. You’ll want to review the sections that cover payment of wages. While state law does not allow employers to mandate direct deposit, in the Attorney General’s opinion this … Alternatively, employers can choose the bank that employees must use for direct deposit. Mandatory Direct Deposit Notification (To be signed by all new hires, and rehires on and after August 1, 2007) In accordance with the State Controller’s Policy issued July 1, 2007, as a condition of employment, a person hired or appointed to a position in a state agency on or after August 1, 2007, and who is You may also opt for paying employees through direct deposit, paychecks, or cash. 807 CMR 18.00: Mandatory direct deposit ; 807 CMR 19.00: Eligibility for out of state service purchase ; 807 CMR 20.00: Employer in qualified governmental plan ; 807 CMR 21.00: Maternity services credit ; 807 CMR 22.00: Interest on incorrect payments ; 807 CMR 23.00: Effective date of service purchase interest rate ; 807 CMR 24.00: Shared employees It is uncertain whether an employer can lawfully require direct deposit. On the chart, states that do not have a direct deposit law are marked N/A. If your state has a law either for or against required direct deposit, you must follow it. It is the policy of the State of Idaho that all employees paid by the State Controller’s Office (SCO) be required to use the Direct Deposit feature to receive payroll related payments. However, the state. Depending on state, an employer may be able to require employees to accept direct deposit. Federal Law 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. Mandatory Direct Deposit . In Texas, if an employee has a bank account, an employer can require direct deposit as long as they give 60 days notice. But before you instruct employees they have to make the switch, be sure you know if mandatory direct deposit is legal in your state to avoid the risk of penalties. You asked if direct deposit of a paycheck can be mandatory. Direct Deposit. Contact any Wessels Sherman attorney to discuss questions regarding this subject. They are not intended either as a substitute for professional advice or judgment or to provide legal or other advice with respect to particular circumstances. Federal law clearly states that an employer may not require an employee to accept direct deposit of wages at a particular financial institution. OPM Mandatory Direct Deposit Notification (R 06/2011) In accordance with Act 1887 of 2005, as a condition of employment, a person hired or appointed to a position in any agency in State government on or after August 12, 2005 shall be required to accept payment of salary or … Maine: Employers in Maine can require direct deposit. ScottyMacEsq : Alabama - No law regarding direct deposit. But many states provide even greater protections to employees than Regulation E, such as prohibitions on mandatory direct deposit or added employee fees, or requirements to provide a pay statement for each deposit. The Society of Human Resources Management has a useful compilation of state laws on wage payments and direct deposit … Depending on state, an employer may be able to require employees to accept direct deposit… Assembly passes bill requiring direct deposit for state employees Updated Mar 30, 2019; Posted Jan 28, 2013 The N.J. But some workers can’t because they don’t have a bank account. Alaska - Cannot mandate direct deposit.. Arizona: Effective July 20, 2011 an employer may give its employees a choice: either give written consent to direct deposit and designate a financial institution, or be paid by paycard. But I'm not going to give anyone ideas as to what those may be. Employers must receive written authorization from an employee to pay by this method. DIRECT DEPOSIT FORM FOR NYS EMPLOYEES RETURN COMPLETED FORM TO YOUR AGENCY/DEPARTMENT PAYROLL OR PERSONNEL OFFICE AC 2772 (REV 07/2020) Page 1 of 2. Mandatory direct deposit systems are permitted under certain circumstances: The employee must be able to collect his or her wages at a bank or facility in the State of Wisconsin. The following chart summarizes the requirements under state law that an employer must comply with to legally pay wages into employees' checking or savings accounts by direct deposit. In an effort to provide Louisiana state employees with information about accounts available from Louisiana financial institutions for compliance with Mandatory Direct Deposit, the following links to two searchable databases are being provided. There may be some unforeseen reason that an employee could use for refusing direct deposit and which would then need to be accepted by the employer. “Mandatory” means that a state allows you to make e-payment a condition of employment, if you choose. 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. Read our resource on emerging pay options to learn more. While a handful of states permit employers to mandate direct deposit (usually with some restrictions), most, like Illinois, allow direct deposit only with the agreement of the employee. 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. State laws usually require that employees voluntarily participate in direct deposit or paycard programs. SECTION A: EMPLOYEE INFORMATION (REQUIRED) NAME (LAST, FIRST, MI) NYS EMPLID . If you can’t mandate direct deposit, there are other alternative pay methods we can help you with. … 3. Gov. Vermont: Vermont employers can’t mandate direct deposit. Cash Payment of Wages. But is that legal? Compare employee payment methods by downloading your free guide, “A Guide for Deciding How to Pay Your Employees.” Federal payroll card regulations. The New York State Labor Law provides as follows: Section 192. The chart below summarizes the states’ direct deposit/paycard rules. Your browser does not allow automatic adding of bookmarks. New Hampshire: Employers can’t mandate direct deposit; workers must authorize it in writing. 1. While many states have rules limiting or regulating direct deposit of wages, Washington is not one of them. The Final Regulations, which closely track earlier proposed regulations, will become … Before diving into pay card laws by state, familiarize yourself with federal payroll card regulations. You’ll get to explore thousands of resources that will help you be confident in your HR decisions, increase your productivity and deliver on your business strategies. Statewide Accounting Policy . Utah’s laws are the most unusual. 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 … Direct Deposit Laws by State. The EFTA is a federal law enacted in 1978 to protect consumers when funds are transferred electronically. Mail to one of the following: Black Hills State University, 1200 University St Unit 9568, Spearfish, SD 57799 Dakota State University, 820 N … However, the problem with the amendment is twofold: The state law does not overcome whatever objections the DOL and the EEOC may have toward such a system under the federal laws they enforce. They allow employers to require direct deposit only if they pay at least $250,000 in payroll taxes to the state. The U.S. Bank FOCUS paycard constitutes a direct deposit account. SUBJECT: Mandatory Direct Deposit Employees currently receiving a hardcopy paycheck (paper warrant) through Central Payroll will need to take action prior to October 1, 2013. General Information SP-14 Direct Deposit Direct Deposit of Payroll Requirements (1 CSR 10-8.010) Payroll and Employee Reimbursement Direct Deposit Application Paycard Comparison Chart - Effective 01/15/2012 Central Bank An employer may pay wages to an employee by direct deposit, so long as the employee has consented to direct deposit in writing and the employee is allowed to select the financial institution with which the payment is deposited. Under P.L. Direct deposit: it seems simple enough. Alternatively, if at least two-thirds of company employees agree to accept payroll direct … Make sure to include your direct deposit information in this filing (where it asks if you want any refund sent by direct deposit). Most employers offer direct deposit as an alternative method of wage payment because it is generally a more secure, efficient and inexpensive method than paying employees in cash or with paper paychecks. “Mandatory” means States may also allow paycard vendors to charge em­ployees fees, beginning with the second transaction. Chris Christie recently signed a bill into law that will make direct deposit mandatory for many state and municipal employees. Let’s start with the federal Electronic Fund Transfer Act (EFTA). While state law does not allow employers to mandate direct deposit, in the Attorney General’s opinion this … Your earnings statement will indicate the change in your gross salary or deductions and the new net salary will continue to be sent to your financial institution without interruption. The following chart summarizes the requirements under state law that an employer must comply with to legally pay wages into employees' checking or savings accounts by direct deposit. States without mandatory direct deposit laws follow federal laws. LAST 4 SSN PHONE (AREA CODE + PHONE NUMBER) WORK EMAIL HOME ADDRESS (STREET, CITY, STATE, ZIP … In all cases, contact your state labor department for the full story. Mandatory Direct Deposit Information. 400.2.7 Adopted: 06/10/08 Amended: 06/10/14 Page 1 of 2 ELIZABETH CITY STATE UNIVERSITY Mandatory Direct Deposit Policy Preamble It is the policy of Elizabeth City State University (ECSU) that all SPA, EPA, Temporary and Mandatory Direct Deposit Information. On September 7, 2016, the New York State Department of Labor (“NYSDOL”) adopted final regulations (“Final Regulations”) limiting the methods by which New York employers may pay their employees and defining mandatory procedures for the use of direct deposit and payroll debit card payments. However, even these states maintain a mandated exception for employees who don’t have a bank account, allowing them to opt for a traditional paycheck, payroll card, or cash compensation. And there cannot be a charge to those employees who opt to be paid by direct deposit. At Complete Payroll Solutions, I’m one of the experts on our compliance team that guide businesses throughout the Northeast on federal and state labor and employment laws like those that govern pay. Enter your email address to subscribe to this blog and receive notifications of new posts by email. In the absence of a state law, federal Regulation E may be followed. State … The Final Regulations, which closely track earlier proposed regulations, will become … If your state has a law either for or against required direct deposit, you must follow it. Utah allows employers to require direct deposit only if they are required to pay a minimum of $250,000 in state payroll tax or if two-thirds of the workforce of a firm agree to direct deposit. https://www.paycor.com/.../can-employers-make-direct-deposit-mandatory New York: New York employers can’t require direct deposit but can pay by this method with an employee’s advance written consent. But many states provide even greater protections to employees than Regulation E, such as prohibitions on mandatory direct deposit or added employee fees, or requirements to provide a pay statement for each deposit. However, employees who do not have a bank account are not required by law to get one. Alternatively, if at least two-thirds of company employees agree to accept payroll direct deposits. Kentucky Mandatory direct deposit is permitted, but employees must be able to withdraw each payment at full face value and employers must pay any resulting service charge. While a handful of states permit employers to mandate direct deposit (usually with some restrictions), most, like Illinois, allow direct deposit only with the agreement of the employee. N . There are currently 198 CRT employees who are not enrolled in direct deposit. They allow employers to require direct deposit only if they pay at least $250,000 in payroll taxes to the state. Review your state laws for details or contact our compliance team, who can advise you on the legality of mandatory direct deposit for peace of mind. No employer shall without the advance written consent of any employee directly pay or deposit the net wage or salary of such employee in a bank or other financial institution. Use of the service is subject to our terms and conditions. N.J. Here’s a summary of how states throughout the Northeast treat direct deposit. © Copyright 2021 Complete Payroll Solutions: HR & Payroll Services & Benefits, COVID-19: Follow our dedicated page for updates, The employer chooses the bank but offers another payment method. Washington State’s stance on mandatory direct deposit: What about Washington state law? And that’s where things can get tricky. States that don’t have laws aren’t included. If an agency has employees that need to be exempted for business reasons from the Mandatory Direct Deposit Policy, the agency must send a written request stating the employee’s name and the reason for the exemption. Each state may have different laws in effect that could affect your ability to require direct deposit. The EFTA is a federal law enacted in 1978 to protect consumers when funds are transferred electronically. Rhode Island: Mandated direct deposit is not allowed. Utah’s laws are the most unusual. Texas Mandatory Direct Deposit. However, this doesn’t apply to employees in exempt executive, administrative, or professional capacities who earn over $900 a week or those working on a farm. States without mandatory direct deposit laws follow federal laws. State Law. However, certain laws must be followed when using direct deposit, and they vary by state. If you’re not familiar with your state’s employment laws and regulations, you can generally find them online or through your labor department. 2013, c.28, direct deposit will be required for all State employee compensation on and after July 1, 2014. On September 7, 2016, the New York State Department of Labor (“NYSDOL”) adopted final regulations (“Final Regulations”) limiting the methods by which New York employers may pay their employees and defining mandatory procedures for the use of direct deposit and payroll debit card payments. 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