Ask the BPHR Advisor: Can We Require Direct Deposit?

Ask the BPHR Advisor: Can We Require Direct Deposit? 600 338 Balance Point Team

BPHR’s Director Lisa Salcido, SPHR, SHRM-SCP provides answers to your pressing HR questions.

Question: All of our employees, except for one, receive wage payments via direct deposit. Can we require the one employee to elect direct deposit or charge him a fee for the cost of printing checks?

Answer: Direct deposit is a very popular option with many benefits for employer and employee. I understand the inconvenience for just one manual check per pay period but State wage payment laws must be followed.

Since your employee works in New Jersey, the following conditions must be met for an employer to pay employees via direct deposit:

  • Employees must first authorize payment by direct deposit;
  • Employees must be permitted to choose the financial institution; and
  • Employees must not incur added fees or costs as a result of participating in the employer’s program.

You should thoroughly explain the advantages of direct deposit to your employee, such as no trip to the bank, instant access to their pay even when they are out of the office on pay day and no chance of losing a paper check. Hopefully your employee will change their mind and consent in writing to allow direct deposit, but you cannot require direct deposit.

In New Jersey, you cannot deduct wages for paycheck printing fees without the employee’s written approval. I would not recommend this approach nor would I advise requesting the employee to reimburse the company by cash or check.

If your employee refuses direct deposit and frequently loses their check, stop payment and re-issuing fees can add up. I would recommend handling this as any other performance issue. Explain the time and cost involved when the employee is negligent with their paper check and that the employee would be subject to discipline in the same manner as employees with other performance issues.

Take a More Balanced Approach to HR with BPHR

With BPHR, an HR Generalist will help you navigate the intricate nuances of employment law ensuring your compliance so you can focus on more strategic tasks. Schedule your free phone consultation today to learn how your organization can benefit from BPHR.

Have a question for Lisa? Email her directly.

DISCLAIMER: The material presented on this page is for informational purposes only and does not constitute legal advice or legal opinion. 

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