Making Direct Deposit mandatory

jferret

Has anyone out there ever told your employees that everyone has to do direct deposit? We are in Connecticuit, don't know if state regulations vary or not. If you have made it mandatory what about the employees who do not have checking/savings accounts for various reasons. Can you make everyone have direct deposit? How can you make employees open up accounts? Please help. My controller wants to do this and I am uncertain how we can.

How can you tell someone what to do with their check?

FunHRBanker

I know that in WI you can make direct deposit mandatory, but you cannot tell the employee where they must have their account. Better check with CT state rules though.

LisaMN

In MN you can not require direct deposit. But you can require the ee to waive it in writing.

Dutch2

Here at our bank in Missouri we can and do require all employees to use Direct Deposit but we can not force them to use a particular financial institution. This also happened while I was with Wally-World in Arkansas. There they warned everyone that at this point in time it was voluntary, but at a specific date down the road it would be mandatory for all so be getting your banking accounts set up.
Good luck,
Dutch2

AJ SPHR

As others have echoed, look at state laws. We investigated this possibility in PA but were told we could only require mandatory D.D. for new hires; couldn't mandate that current employees switch to D.D.

cthr

We are a CT employer and you can not make direct deposit mandatory in the state of CT.

deniseE

We're in PA too and did just "force" everyone to switch to dd....we understood that not everyone had a checking account and if they had credit issues, may have difficulty getting one...so we worked out an arrangement with a local credit union that would "guarantee" these guys an account and so far we've been good to go.

I think we have a written policy if you'd like to see it.....

jferret

Thank you cthr for your response. I do appreciate it.

jf.

Ruskanen

Warn employees several months in advance that the change is coming. That way people have time to find a bank if they don't already have one. For employees that don't have an account and are considered "unbankable", you can offer a pay card option. It is a card that they use like a debit card. You direct deposit their net sum into the account of the card. There are several different products out there, and usually they have service charges to the employees...monthly fees, ATM fees. You have to shop around and find the best product for your employees.

Rockie

We now require direct deposit on all employees. We have a few that we grandfathered in who still get "live" checks and it's just an additional expense and bother to the company. The check card is a good idea...most banks will allow a savings account even if the employee cannot have a checking account. But....There are more than likely restrictions on how many withdrawals they can make per month without penalty.

System

Sorry, I don't think you can require direct deposit in Connecticut - only with ee's permission.

In the Subscribers Area of this website, I found Conn. Gen. Stats. section 31-71b, which says you have to pay "in cash, by negotiable checks or, upon an employee's written request, by credit to such employee's account in any bank which has agreed with the employer to accept such wage deposits."

James Sokolowski
HRhero.com

cthr

James,

You are correct. My prior posting says that you CANNOT mandate direct deposit in CT.

njjel

In NJ you may NOT make Direct Deposit mandatory.

jferret

James,

Thank you for your information. I needed to re-enforce that we cannot make direct deposit mandatory in Ct.

Thanks you everyone for your responses. HR Hero is a great tool to have for all HR Questions.