Q. What is the law regarding direct deposit?

A. The Federal law states that an employer may not require an employee to accept direct deposit of wages at a particular financial institution. State laws vary widely from state to state. A few states have no state law on the subject.

Q. Is it legal for my employer to mandate or require me to be paid by direct deposit?

A. Your employer may not require you to have your wages deposited at a particular bank. Otherwise, the answer depends on your state law and the state laws vary widely. Some states require employee permission or consent and other prohibit any charges to the employee.

Q. What if my state has no law on the subject?

A. If no state law exists, most attorneys generally agree that an employer may require direct deposit of wages, as long as the employer does not designate a particular financial institution.

Q. Is direct deposit safe?
 
A. Yes, direct deposit is considered a very safe method of payment.
 
Q. Will my employer have access to my bank account if I sign up for direct deposit?

A. No. Your bank account is private and your employer will not have access to your account.

Q. What are the advantages of direct deposit to my employer?
 
A. Payroll direct deposit can often significantly reduce payroll costs to an employer. Many administrative and distribution costs can be reduced.

Q. What are the advantages of direct deposit to an employee?

A. Direct deposit is automatic, immediate and eliminates waiting periods for a check to clear. An earnings statement can provide all the same information as a pay check stub.