Direct Deposit Authorization

We have implemented a new payroll system that gives employees the ability to change their direct deposit information online. I was wondering if we turn this feature on do we still need to obtain a written authorization from the employee when they need to add or change bank information.

Comments

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  • Does the employee have to log in securely using a username and password to give this authorization or is there just a website they can go to and fill out a form?  Many of the HR Info Systems have a log in for each employee where they can view payroll information and also make changes like direct deposit and address and phone number.  Since there is a secure log on for each individual employee then this does count as a "written" authorization and you don't need to do anything else.  You can show the authorization if it was ever questioned because the system will show when the person logged in and what information was changed.  If there is just a website where the employee can fill out a form then I would have the employee sign something since anyone could go and fill out the form and have the information changed for the direct deposit. 
  • We decided not to permit employee self-help with our new system.  Security was only 1 of many reasons but another highlight was end user computer competency.  We have a lot of people who don't "get" computers which, in turn, could lead to security issues that don't fall into the usual concerns about hacking and so forth.  There's a pretty big tradeoff and the larger your company is, the the more sense it makes to go self-help.

    Consider the scenario in which an employee puts in their wrong banking information and then turns around and says that they didn't do it.  all you can find out is that someone used the employee's name and password from the local public library.  You may or may not get your money back but that employee has to be paid.  If that kind of problem is less expensive than the headcount required to provide full service to your internal customers, then you are ok.  That's a sort of bizarre situation that I don't think comes up very often but it will be a headache each and every time something like that happens.

  • Thanks for the reply. Each employee does have a secure user name and password, we also have an HR approval process on any direct deposit changes in the system. It makes sense that this would count as "written authorization."
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