Payroll Checks

bmcgee

Our company has a mandatory direct deposit rule. If after 2 or 3 paychecks an employee has not turned in a direct deposit form is it against rules to hold the paycheck until they turn the form in?

LindaS

My understanding is that you CANNOT withhold an employee's paycheck for ANY reason. There may be reasons you are not aware of that the employee has not returned the form. In one company that I worked for where direct deposit was mandatory we offered the employees the option of the money going into an existing account or we opened an account for them. There was no charge for this (we previously worked out an agreement with a local bank) and the employee's did not have to pay for checks either. Most new employees, especially younger ones, took this option and it worked out great.

Just a thought.

JudyRoy

[font size="1" color="#FF0000"]LAST EDITED ON 01-17-03 AT 08:09AM (CST)[/font][p]In most states you cannot withhold a pay check for any reason. In some states you cannot mandate direct deposit either. We are in MD and we cannot require our employees to use direct deposit. There are many reasons why employees don't want direct deposit and/or bank accounts. I realize it makes your life easier but I would suggest that you find ways to "encourage" your employees to participate.

Balloonman

We recently went to direct deposit. I knew I could not force them to sign up, but we changed our payroll policy so that if they did not sign up, we mail their paychecks to them. They are mailed the day before the actual payday. You would be surprised how many signed up. Not everybody but most.
So far we have had three occassions where the post office lost a check. Those three individuals signed up for direct deposit the next week.
My $0.02 worth.
DJ The Balloonman

Theresa Gegen TX

Some states allow mandatory direct deposit and some do not. The first thing you need to do is determine what Georgia payday law says. You can call a local employment law attorney (If you don't know one, try the Georgia newletter editors listed on this site) or you can try contacting your state Workforce (Employment) Commission (the same people that handle unemployment claims etc.) The agency may give you the answer about whether you can mandate direct deposit.

If you can't mandate it, the you just have to keep giving this employee his paycheck. If the state says it can be required, the answer will probably be different.

Good Luck!

Rockie

You can't withhold a paycheck. If you require direct deposit, they should sign up on the front end before they start working. In most states (like South Carolina) you can require DD as long as employee has access to some number of free withdrawals from an account without penalty. A lot of folks cannot get checking accounts because of their bad history with a bank (bounced checks, etc.), but they can get a savings account. However, I think there are a few states that do not allow you to mandate direct deposit.

In fact, when I worked for a bank, there was mandatory direct deposit for everyone. If you did not have an account or you failed to sign up for direct deposit, they actually opened one for you and deposited your paycheck into it. They did not issue live checks.