Can we charge a fee for paper paychecks?

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in Office Management,Payroll Management

Q. We require direct deposit of employee paychecks. We have one employee who hasn’t set up an account despite frequent requests. We have to mail his check from headquarters, sometimes via courier. Can we charge him a fee? — J.P., Illinois

A. Depending on your state’s law, it may not be legal to require employees to use direct deposit. Assuming it is legal, it is not a good idea to charge the employee a fee. It would be better to meet with the employee, ask him why he has not set up an account, and offer to assist him in the process. He or she may not realize how easy and convenient this will be or may be suspicious of the banking system. If so, explain it to him and offer assistance.

{ 2 comments… read them below or add one }

Pat October 1, 2012 at 11:05 am

Some states will not allow employers to charge any type of fee for a paycheck, so it would be wise to check your states laws to see if there is any such restriction.

Also: some people cannot get checking accounts and don’t have debit cards. Personally, I am not a fan of pay cards, but a lot of companies use them.

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Bob September 28, 2012 at 6:34 pm

How arrogant to think that because you “offer” direct deposit that everyone wants it. You have to mail a check from headquarters? Boo-hoo. Next thing you know, you’ll be complaining about the fact that you actually have to *pay* your employee! Direct deposit is not safer than a paper check. Bank accounts have been hacked, and people have lost their social security benefits that were sent electronically. The truth is that some people want a paper check for reasons that have nothing to do with safety or suspicion of the banking system. It’s because it is far more convenient for them to have a check. And that’s *their* decision to make, not yours.

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