Free is good. Banks are happy to offer free services—to customers who have direct deposit. It seems, then, that direct deposit sells itself. But direct deposit is of no use to employees who don’t have bank accounts.
For them, paycards may be the answer. Or maybe not. One employer ran into a buzz saw when it forced its employees to use paycards.
Paycard traps. The biggest problem for employees is the numerous fees paycard issuers pile on to access the funds loaded onto the card, for statements, etc. The biggest trap for employers is mandating paycard use.
That’s what tripped up one unlucky employer—employees sued, alleging that they incurred fees when they were forced into a paycard program. State laws, in fact, require that employees be able to access their entire net pay fee free.
Under federal law, you can’t force employees into a paycard program, unless they can choose the bank. This obviously won’t work for unbanked empl...(register to read more)