If you are using paycards, or are entertaining the idea of making the move there, you need to abide by some rules.
- According to the federal government, employers cannot force employees to use paycards unless the employee is able to choose the bank. If you offer paycards to employees, you should also offer to pay them by check.
- According to most states, employees have to volunteer to use paycards. ALL states require that employees must be able to get their entire net pay from a paycard without incurring a fee. Employers must be very careful about the cards and where they load employees’ pay for this reason. Otherwise they may set themselves up for trouble if fees are charged.
When your new employees fill out paperwork, include clear explanations about paycards (especially regarding potential fees). Also, have them sign a form stating they understand all of their pay options, and they voluntarily choose or decline the paycard option. Shop around for paycards that are accepted at ATMs and don’t charge a fee. Other benefits can come bundled with paycards, too, like bank accounts, checks, and online services for your employees.
Additionally, don’t be disappointed when some employees still opt for direct deposit, and still others continue to choose that old hard copy paper check. At least you don’t have to pay them in cash anymore!