mandatory direct deposit?

It's been suggested by a member of upper management that we require all employees to be paid by direct deposit as part of our emergency plan and to avoid post-Katrina like problems with trying to get paychecks to employees.  Do you think this is wise?  I think all of our employees have checking accounts, but I am not sure.


  • 3 Comments sorted by Votes Date Added
  • I could be a good idea, but you better check your state's law. Mandatory direct deposit is illegal is many states.
  • You may want to try making it optional first.  Hold a meeting to explain the process and the reasons why this is beneficial for the employees. It has been an option at our company for a few years now,  and while I don't have exact figures, I'd say two-thirds to three-quarters of our employees are now on board. If you can't make it mandatory as per your state law, this way you might at least be solving any potential problems (similar to post-Katrina) issues for half or more of your workforce...
  • There are also "debit" accounts available now.  Many of the tax agencies are using them for tax refund deposits.  Then you can set them up to have your paychecks deposited directly to them.  We need to keep in mind that there could be a stigma involved with trying to make direct deposits mandatory.  It's getting into people's personal lives, who may be unable to open checking accounts for whatever past financial reasons.  Definitely open the voluntary aspect of it though, especially for your reasoning, and perhaps broadly mention the ability to use these "debit" accounts.
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