States mandating direct deposit

As noted above, Michigan employers still cannot mandate direct deposit for all employees, but the new law moves us closer to that system.

states mandating direct deposit-50states mandating direct deposit-28

95- 25.7 do not require a specific form of payment.

The chart below summarizes the states’ direct deposit/paycard rules.

“Mandatory” means that a state allows you to make e-payment a condition of employment, if you choose. In all cases, contact your state labor department for the full story.

If direct deposit is the only option offered the employee, the employees must be able to choose their own financial institution. Conversely, we take the position that if direct deposit is completely optional and an employee elects to be paid by direct deposit, then the costs to this employee can bring the employee's pay below the minimum wage.

If direct deposit is used in conjunction with the use of a payroll card account, an employer can require the payroll card account to be with a particular financial institution as long as deposits in that institution are insured by the It is also the enforcement position of the N. Department of Labor that if the payment of wages by direct deposit by an employer is mandatory, then its employees must not incur additional costs as a result of participation—such as bank fees—if those costs result in an employee being paid less than the N. If your business/employer comes under the federal Fair Labor Standards Act (FLSA), you will need to contact the U. Department of Labor Wage and Hour Division concerning the federal minimum wage and their position.


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