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Can we mandate paying via direct deposit?

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in Human Resources

Q. Can a Texas employer require its employees to accept payment of wages through an electronic transfer of funds?

A.
Most states require employee consent before an employer may pay wages by electronic funds transfer. Moreover, a few states prohibit employers from denying employment to an applicant or discharging an employee based on the applicant’s or employee’s refusal to accept payment of wages by electronic funds transfer.

In Texas, employers are permitted to pay wages in one of three ways:

  1. In U.S. currency
  2. By a written instrument (a check) issued by the employer that is negotiable on demand at full face value for U.S. currency
  3. By the electronic transfer of funds.

Employers apparently do not require a worker’s consent. As a practical matter, however, if you choose to pay wages only through electronic funds transfers, disclose this information to workers and attempt to secure their consent first.

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