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    Mandating direct deposit

    There are many benefits of having direct deposit: saving employees a trip to the bank, reducing employer costs on paper checks and cutting down on paper waste. employees receive their paycheck via direct deposit, according to an American Payroll Association survey.“Mandatory” means that a state allows you to make e-payment a condition of employment, if you choose. We would like to require employees to accept pay via direct deposit. The Fair Labor Standards Act does not directly answer this question. As an alternative, the employer may make arrangements for employees to cash a check drawn against the employer’s payroll deposit account, if it is at a place convenient to their employment and without charge to them. (Note – we strongly recommend against paying employees in cash.) Most states also have laws that govern when and how employers must pay employees.An employee may set up multiple accounts at the same or different banking institutions for receipt of direct deposits.Participation in direct deposit will be a condition of employment.As of July 1, 2009, new and current full- and part-time faculty and staff and temporary and casual employees will be required to participate in mandatory direct deposit. Employee pay will be electronically deposited directly into one or more checking or savings accounts designated by each employee.

    Employees returning to Hampshire after a break in service need only email the payroll office to reactivate direct deposit.

    For the most part, many aspects of business are done online without a physical paper trail.

    So when you are planning how to pay your employees, you may consider direct deposit.

    Because of the benefits of direct deposit, one gleaming question may come to mind: can employers make direct deposit mandatory?

    The answer depends on the location of your business.

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