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Direct deposit requires employee’s written consent

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in Employee Benefits Program,Human Resources

Q. We have been told by our accounting office that the company could save a great deal of money if it could get away from the payroll practice of providing employees with checks, and instead go to a direct-deposit arrangement. We have both a non-union work force and a small group in a union. Can we go ahead and implement such a change, or negotiate a change with the union? — M.B.

A. No and no. The Michigan Payment of Wages and Fringe Benefits Act does not permit direct deposit of wages without the employee’s written consent. Nor is there any exception for negotiating such a policy with a union. While you cannot coerce or discipline employees who are unwilling to cooperate, you may want to have employees sign up for direct deposit when they apply for a job. And you can ask employees to switch over. While an employee can withdraw consent at any time, once employees start, they rarely want to go back to checks.  

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