Paychecks issued from out-of-state banks may trigger a labor-code violation — Business Management Daily: Free Reports on Human Resources, Employment Law, Office Management, Office Communication, Office Technology and Small Business Tax Business Management Daily
It’s a little-known detail within some state labor laws, but in California, for example, the issue could end up costing an employer big. In Fleming v. Dollar Tree Stores Inc., a federal district court in San Francisco is letting a proposed class action go forward that alleges Dollar Tree issued payroll with checks from an out-of-state bank with no California branches. That, the complainants contend, forced employees to incur check-cashing fees and extended waiting periods for their deposits.
To avoid the same fate, the court hinted that all employers can satisfy the mandates of stringent labor codes by doing one of these:
1. Offer to cash employees’ checks at one of its business locations.
2. Retain a check-cashing service.
3. Arrange for in-state banks to waive any check-cashing fees that employees otherwise would have to pay.
If you handle payroll compliance, beware: As other tax revenue sources dry up, the IRS is hiring 700 new revenue agents whose only job will be to hunt down payroll-law violations. That means intense new scrutiny of your W-2s, 1099s, 1095s and other payroll tax reporting compliance....Click here to find out more.