Chase Paycard Plus

Many of our employees take advantage of Direct Deposit; however, we had not made direct deposit mandatory because some employees claimed that they don't have a checking or savings account. Through our payroll vendor, we want to implement a Paycard to take the place of a live check. Because this does not require an individual to have a checking or savings account of their own, we want to make this mandatory that they sign up for this if they don't want to sign up for direct deposit. How much notice should be given to employees that we are going to require this.

Employees will be able to go to Chase Bank and withdraw funds with a teller at no charge up to 4 times a month. They can also use the card at stores that allow debit cards and cash back with the transaction at no charge. There would be fees for use of the card at ATMs


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  • If you haven't already done so, check your state law. There might be some type of requirement there mandating the notice time. If not, I would give 30 days notice. That would allow time for those that don't have checking or savings to open accounts if they wish instead of being forced to receive the p-card. You might also check with the company's bank. Our bank agreed to open a checking account for any employee not able to normally open an account. No overdraft protection, but at least the employee had a vehicle for direct deposit.
  • I'm not very familiar with pay cards and am curious about a couple of things.

    Are they issued a new card each pay period or do they get one card that is "re-filled" each pay period?

    If they lose the card and report it quickly are they issued a new card with the balance that is currently on the card or do they lose all of it the same way they would if it was cash?

    Do they have to go to a bank to find out how much is still left on the card or can they do a balance check at an ATM? If so, would the ATM charge them for that?

  • Presumably your payroll vendor is handling legal clearances for you, but be aware that state laws are all over the place on whether employers can mandate the use of such cards -- or for that matter, direct deposit.
  • I thought this might be a timely topic to mention that state laws on payroll cards are one of two new topics addressed in the 2010 edition of Fifty Employment Laws in Fifty States, which will be available for shipment this week. For the most part, the majority of states don't have many restrictions on their use, as they still seem to be a relatively new tactic for payroll, but there are a few states with specific requirements about employee consent and the like.
  • This post is timely because I just got back from our 3rd annual Kansas SHRM Legislative Conference. The Kansas Council decided it start it after so many of our members worked hard to get a paycard law passed here in Kansas. I was able to watch members give testamony the first time I went to an HR on the Hill event. The result was the passage of our currentl paycard law which was applauded (that year anyway) in the Payroll Manager's Letter as the best in the country.
    The paycard works just as Tiles52 discussed. You can use it as a credit card or just get your cash out. This is preferrable to people who don't want to have a checking account, and avoids issues where employees become overdrawn and the bank expects the employer to cover it. It's a great idea, and I sure wish I could take credit for it.
  • I know in Michigan we can not mandate direct deposit. We have to be careful that whatever system we would institue would not incurr a cost to the employee. That is a major point in our law.

    We changed our wording to suggest direct deposit and so far no issue as we are a small company.
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