Direct Deposit
HollyatSouthEastBank
24 Posts
I work at a bank. We do direct deposit. I know in Tennessee that we can have all employees direct deposit. But, can we make them use our bank for this?
Thanks, Holly
Thanks, Holly
Comments
Paragraph 10(e)(2)
1. Payroll. An employer (including a financial institution) may not require its employees to receive their salary by direct deposit to any particular institution. An employer may require direct deposit of salary by electronic means if employees are allowed to choose the institution that will receive the direct deposit. Alternately, an employer may give employees the choice of having their salary deposited at a particular institution (designated by the employer), or receiving their salary by check or cash."
E 12 CFR 205 Electronic Fund Transfers
Establishes the rights, liabilities, and responsibilities of parties in electronic funds transfers and protects consumers when they use such systems
Regulation E provides a basic framework that establishes the rights, liabilities, and responsibilities of participants in electronic fund transfer systems such as automated teller machine transfers, telephone bill-payment services, point-of-sale (POS) terminal transfers in stores, and preauthorized transfers from or to a consumer's account (such as direct deposit and social security payments). The term "electronic fund transfer" (EFT) generally refers to a transaction initiated through an electronic terminal, telephone, computer, or magnetic tape that instructs a financial institution either to credit or to debit a consumer's asset account.
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Might you check with your Compliance Officer.
Edit: The cost for us is the same regardless of where the check is deposited.
Every time one of our auditors is here I have to review all the employee accounts and print out all their statements. Then I have to go through individual transactions the auditors feel might be suspicious (transfers, etc.) and get explanations for them.
But when Paychex has made errors it takes the same amount of time to correct it regardless of where the employee banks.
It's also easier to fix errors; the other day we found out an employee had quit a full week before anybody let us know and she'd been paid for an extra week. We were able to reverse the amount she'd been paid back out of her account immediately, reverse the payroll on the payroll system, and deposit the correct amount into her account, all within about 15 minutes, which we couldn't have done had her payroll been direct deposited at another financial institution.
We don't say that employees have to use our bank for their direct deposit account, but one of the "perks" of working here is that each employee is given two free deposit accounts and people appreciate the value of a free account enough that they don't hesitate to open one and use it for their payroll.
Cheryl