Payment of Wages by Paycard: New FAQs Added
Author: Rena Pirsos, XpertHR Legal Editor
Paycards have emerged as a way to pay employees electronically in addition to direct deposit. Paycards are a good option for workers who do not, or cannot, have a bank account that is capable of receiving direct deposits. Approximately one in 10 employees is unable to use direct deposit as a means of wage payment.
An employer must comply with both federal and state laws pertaining to paycards. The number of states that have enacted a paycard law and/or regulations has dramatically increased over the past few years. However, while federal paycard laws and regulations generally mirror direct deposit laws, state paycard laws vary widely from state to state.
To help an employer understand how paycards work and what is involved in offering them to employees, the following new FAQs have been added:
- What is a paycard?
- How do paycards work?
- Are all paycards the same?
- Why would an employee want to be paid with a paycard?
- Can an employee without a bank account be paid with a paycard?
- Does paying an employee with a paycard provide an employer with any advantages?
- Are there any employees who should not be paid by paycard?
- Can an employer pay an employee's final wages on a paycard?
- Can an employer require an employee to accept a paycard?
- Can an employer charge any fees to employees who enroll in its paycard program?
- What happens if an employee loses his or her paycard?
- When assessing and choosing a paycard program, of what features should an employer be wary?
- Can employees take their paycards with them to a new job?
- How can an employer overcome an employee's resistance to being paid with a paycard?
- If a payroll error occurs when an employer is loading an employee's paycard, how should the employer correct the error?
- If an employee is paid with a paycard, when are the wages considered paid?
- Can an employee's pay be loaded onto his or her personal debit card like a paycard?