You can determine your state’s stance 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. 3. If you’re outside of the Northeast, it’s best to consult the local laws in your area to make sure you’re in compliance. XpertHR is part of the LexisNexis® Risk Solutions Group portfolio of brands. Employers cannot require employees to have direct deposit at a specific financial institution. Washington State’s stance on mandatory direct deposit: What about Washington state law? If you believe that it is improper for the employer to withhold the $1.50 direct deposit fee, then your son can file a wage claim with Division of Labor Standards and they may be contacted by calling 615-741-2858 (option 3) or toll-free at 1-866-588-6814. Author: Alice Gilman. 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 Contact any Wessels Sherman attorney to discuss questions regarding this subject. For example, there are state laws on mandatory direct deposit that you need to follow. Final Tips. 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. Employers pay employees by transferring money directly to the employees’ bank accounts. “Mandatory” means that a state allows you to make e-payment a condition of employment, if you choose. The chart below summarizes the states’ direct deposit/paycard rules. Workers simply have to be able to make an initial withdrawal of the entire net pay without incurring additional costs. Mandatory Direct Deposit Authorization. N . If you’re not familiar with your state’s employment laws and regulations, you can generally find them online or through your labor department. States without mandatory direct deposit laws follow federal laws. Requires direct deposit for all State employee compensation on and after July 1, 2014; 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. Gov. The following policy statements* will be included in your export: *Use of this material is governed by XpertHR’s Terms and Conditions. However, if you operate in a state with specific direct deposit laws, then you’ll need to follow them. LAST 4 SSN PHONE (AREA CODE + PHONE NUMBER) WORK EMAIL HOME ADDRESS (STREET, CITY, STATE, ZIP … Because federal law allows mandatory direct deposit, employers in states without laws can require this payment method. Attachment 1 Direct Deposit Notification Form (To be signed by all new hires and rehires on and after May 1, 2010) In accordance with the Mandatory Direct Deposit policy issued May 1, 2010, as a condition of employment, a However, employees who do not have a bank account are not required by law to get one. 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. 1. Mandatory Direct Deposit Information. 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. In some states, an employer can make direct deposit mandatory, provided certain stipulations are met. The employee must receive all of his or her wages and cannot be made to incur any charges to receive them. … In some cases, a state may not have a law governing direct deposit, in which case you’d simply follow the EFTA requirements. 2013, c.28, direct deposit will be required for all State employee compensation on and after July 1, 2014. This request should be sent to the State Controller’s Office, Attention: Division of Statewide Payroll. Mail to one of the following: Black Hills State University, 1200 University St Unit 9568, Spearfish, SD 57799 Dakota State University, 820 N … Florida. The law is clear that employers can require employees to authorize direct deposits. State laws usually require that employees voluntarily participate in direct deposit or paycard programs. Copyright © 2021 LexisNexis Risk Solutions Group. The Final Regulations, which closely track earlier proposed regulations, will become effective on March 7, 2017. The short answer is “yes and no." Vermont: Vermont employers can’t mandate direct deposit. But some workers can’t because they don’t have a bank account. Texas Mandatory Direct Deposit. In some states, an employer can make direct deposit mandatory, provided certain stipulations are met. In Texas, if an employee has a bank account, an employer can require direct deposit as long as they give 60 days notice. 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. Direct deposit of salaries into financial ... under chapter 89.08 RCW are exempt from the requirement to obtain a written request of twenty-five employees as required in subsection (1) of this section, and may disburse funds in payment of salaries and wages of employees consistent with this chapter and RCW 89.08.215. While state law does not allow employers to mandate direct deposit, in the Attorney General’s opinion this … View our privacy policy, privacy policy (California), cookie policy and supported browsers. employers may pay their employees and defining mandatory procedures for the use of direct deposit and payroll debit card payments. Make sure to include your direct deposit information in this filing (where it asks if you want any refund sent by direct deposit). Arkansas allows employees to opt-out of direct deposit with a written statement. Since most of our clients operate in the Northeast, next we’ll review state laws governing pay in the region to give you some specific guidance. Mandatory Direct Deposit . The chart below summarizes the states’ direct deposit/paycard rules. Under P.L. SUBJECT: Mandatory Direct Deposit Direct deposit continues to be mandatory for all employees except those with Aapproved@ waivers. 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. In addition to transfers made by ATMs, phone, and debit cards, it also governs direct deposit. This same DWD website states that a mandatory direct deposit system must provide a worker with 100% of his or her wages without the worker incurring any cost to gain access to their pay (check fees, service charges on an account, etc.). https://www.paycor.com/.../can-employers-make-direct-deposit-mandatory A: Direct Deposit is an electronic payment method the State uses to pay all state employees employed by an agency serviced by a payroll system administered by the Office of the State Controller, by having their net pay (pay after taxes and other deductions) deposited directly into Federal law clearly states that an employer may not require an employee to accept direct deposit of wages at a particular financial institution. The EFTA is a federal law enacted in 1978 to protect consumers when funds are transferred electronically. 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. And that’s where things can get tricky. Indiana, Kansas, Minnesota, Missouri, South Carolina, Texas, Virginia, Washington, and West Virginia allow employers to require direct deposit. Alternatively, if at least two-thirds of company employees agree to accept payroll direct deposits. You may also opt for paying employees through direct deposit, paychecks, or cash. 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. Paper checks are losing ground to direct deposit because of the benefits the automated transfers offer. 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. State by State Direct Deposit Laws I work for a mortgage lending company in Florida and the company is considering implementing a mandatory direct deposit policy, which I have been tasked with doing the research. However, you can pay your employees this way if they request it. While state law does not allow employers to mandate direct deposit, in the Attorney General’s opinion this … In addition to transfers made by ATMs, phone, and debit cards, it also governs direct deposit. 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. Massachusetts: State law doesn’t expressly address direct deposit nor whether employers can require it. Alternatively, employers can choose the bank that employees must use for direct deposit. Use of the service is subject to our terms and conditions. Direct Deposit Laws by State. 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 States that Allow Required Direct Deposit. Need more pay card alternative goodness? 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 the absence of a state law, federal Regulation E may be followed. 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. 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. Each state may have different laws in effect that could affect your ability to require direct deposit. Assembly passes bill requiring direct deposit for state employees Updated Mar 30, 2019; Posted Jan 28, 2013 The N.J. The Final Regulations, which closely track earlier proposed regulations, will become … It is only permitted if an employee requests this method of payment in writing. Or they still prefer a paper check. 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. Please press Ctrl/Command + D to add a bookmark manually. 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. States that don’t have laws aren’t included. 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. The employee must receive all of his or her wages and cannot be made to incur any charges to receive them. But is that legal? 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. 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. 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. Under the EFTA, employers can require direct deposit if one of the following conditions is met: The employee can choose the bank © 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. If the State chooses to recover the overpayment from future salary warrants, it may be necessary to remove you from Direct Deposit. 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. CURRENT VERSION OF TEXT As reported by the Senate State Government, Wagering, Tourism & Historic 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. State Law on Direct Deposit In some states, an employer can make direct deposit mandatory, provided certain stipulations are met. Because each state sets its own laws regarding direct deposit of employee paychecks, each state has its own approach to related subjects such as “account fees,” “opting out,” “choosing the financial institution,” etc. While many states have rules limiting or regulating direct deposit of wages, Washington is not one of them. New Hampshire: Employers can’t mandate direct deposit; workers must authorize it in writing. Author: Alice Gilman. Let’s start with the federal Electronic Fund Transfer Act (EFTA). 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. 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 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. 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