Help with Direct Deposit of Payroll

jrbroeckel · June 2003

We are a financial institution, and have the ability to direct doposit payroll into employees' accounts if they have an account with us. We have an employee who refuses to open an account with us so we have to cut her a manual check. Out of 135 employees she is the only one. Can we make it mandatory that she have an account with us in order to receive her check via direct deposit, or are we stuck.

Donna Banker · June 2003

I think you can require DD, but can't require it be with your financial institution.

I feel your pain. I have three employees who get checks.

sonny · June 2003

There have been some other discussions on this. You might try a search. I think others were advised to check their state laws. .some states prohibit it, I believe.

cthr · June 2003

What state are you in. We just recieved our new payroll advisor and they have just addressed this issue. They have all the states listed on the back and what the requirement is.

jrbroeckel · June 2003

Thanks for the response, I am located in Washington state

cthr · June 2003

WA--Mandatory if the employee incurs no cost. Hope this helps. Only about 25% of the states allow manadatory direct depoit- they are -KY-ee gets pay statement and incurs no cost, LA-EE incurs no cost, ME-if funds are available to cover payroll, MA-ee picks bank, MN-unless ee objects in writing, NC, OH-EE picks bank, OK, TN-ee picks bank, TX, UT if for preceding yr ER deposited at least 250,000 in federal taxes and 2/3 of the ee use DD, WI-if in state bank and ee incurs no cost.

MS HR · July 2003

What does it say about Mississippi?

cthr · July 2003

>What does it say about Mississippi?

Mississippi was one of three states that was silent on the issue.

Rockie · June 2003

When I worked for a financial institution, they went from having an outside company doing payroll to doing it inhouse. It was a requirement to have direct deposit. If you refused to open an account, one was opened for you at the bank and that is how you got paid.

It does, however, depend on your state as to if you can require it or not.

cthr · July 2003

It also depends on your state whether the employer can pick the bank. I have no problem with requiring direct deposit if your state allows it, but I would be very uncomfortable requiring them to use a specific bank. I work for a financial institution and I would be very put out if they opened an account for me without my permission and told me that if I wanted to get paid I had to have my money deposited there, which is basically what your doing when you require direct deposit to go to the bank of the employer's choice.

Nat · July 2003

I also worked at a bank and it was a requirement that your paycheck go into an account at the bank. If you didn't have one, one was opened for you. Our paychecks were deposited into that account. We could take it all out if we wanted to and put it somewhere else on pay day, but we always got paid by DD into that account.

Help with Direct Deposit of Payroll

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