"Encouraging" Direct Deposit - current and new employees

inhousecounsel

I have read with interest prior posts about encouraging employees to agree to receive their pay by direct deposit in states where the employee must voluntarily agree to that pay method.

My question is does anyone take steps to encourage direct deposit beyond just asking nicely and providing information about the benefits to the employee and the company? I have some managers who are interested in a little stronger "encouragement" - along the lines of not awarding discretionary bonuses to those who require the company to cut them a paycheck as opposed to using direct deposit, or lesser (though not dramatically lesser) raises for those who refuse to participate.

Also, has anyone ever had a state DOL tell them that it is not permissible to make direct deposit of wages a condition of employment for new employees, i.e., refuse to hire someone who will not accept direct deposit of wages?

Thanks for any insight.

Rockie

I believe there are some states - I don't know which ones that totally outlaw mandating direct deposits. In my state, SC, you can require direct deposit if the employee is able to get at least one free withdrawal from their account per pay period. We send out a signup sheet with our new hire paperwork asking them to sign up and attach a voided check or savings account deposit slip. If someone says they don't have a bank account, we tell them they need to at least open up a savings account. There are a few long term employees who still get a live check before direct deposit was enacted, but I really can't think of anyone that we have hired lately that had an issue with it. Most people appreciate having their money automatically deposited. If there was someone who had an issue with this that they couldn't resolve, we would probably make arrangements for a live check, but I wouldn't encourage this as having dual systems can be expensive and earn the wrath of payroll!

When I worked for a bank, DD was required. If you didn't have an account, they opened one for you at the bank and this is the way you got paid. They did not cut any live payroll checks. Of course, this was back in the dark ages before serfdom was outlawed.

cebudragonlady

In this area, some banks require two pieces of identification - one being.
a photo and the other a credit card . The lower paid employees may not
qualify for a credit card, and thus cannot open even a savings account !
So I am not suprised when our factory's workers don't want direct deposit.
Better for you to find out why before "encouraging" it...

Chari

Balloonman

When we went to direct deposit, we made it clear, it was optional, but those who did not sign up for it would have their checks mailed to their home. We have had 3 or 4 people get checks lost or delayed in the mail, and almost the next day they all signed up for DD. We do this because of the location of job sites and the movement of employees, hard to always know when they were moved to a different jobsite the night before payday.
When checks do not show up on time, I do make employees pay for the stop payment order if they want/need us to cut a check that week and cannot wait to see if it will come a day or two later in the mail.
My $0.02 worth.
DJ The Balloonman

Gillian

You don't give any background information so I don't know if you are working for a company and,j if so, where. In certain communities (ethnic) bank accounts do not fit the culture. In factory environments where I live, on payday here comes the check-cashing van and checks are cashed on the spot. If that is what you have, I don't think that direct deposit will work.

LindaS

In a company I used to work for, we encouraged direct deposit by offering to open the employee's checking account for them (this is a smaller town and we used one bank exclusicely). What we did is provide the employees with the necessary paperwork when they were first hired, had them complete the paperwork, and took it to the bank for them. We then provided them with the temporary checks. In addition, they received free checks (unless they ordered specialized checks), and no minimum balance requirement. This was very well received, especially for the younger employees who did not have previous accounts.

The other thing that was done was to charge employees if we had to stop payment on a check because it was lost or destroyed.