In today’s increasingly paperless world, many employers are switching to electronic forms of payment. These include direct deposit into the employees’ bank accounts, payment via online platforms, and payroll cards. For many employees, these electronic payment forms are easier and more convenient than receiving a traditional paper check.
Just like everything else within the realm of employment law, employees have rights regarding how they receive their payment. If your employer offered you a payroll card instead of a paper paycheck or another form of payment, you do not have to accept the offer.
Yes, But You are Entitled to a Choice
Your employer can offer you a payroll card, but he or she cannot require you to receive your payment via payroll card. A payroll card is a prepaid debit card issued by a major bank, not unlike a Visa or American Express gift card.
Although the payment choices you may be offered and the requirements for paying employees via payroll card vary from state to state, there is no state where employees may be required to receive their compensation on payroll cards. Alternative payment forms you may be offered include:
- Direct deposit to your bank account;
- Paper paychecks; and
- Online platforms like Dwolla and Due. These are most commonly used to pay freelance and remote workers.
A Payroll Card is Not the Same as Direct Deposit
Do not confuse a payroll card with direct deposit. With direct deposit, your wages are automatically deposited into your bank account on payday. With a payroll card, you are given a physical card that can be used like a debit or credit card. Most often, this card is reloaded each payday.
What to Do Before Accepting a Payroll Card
If you are offered payment via payroll card, read the card’s terms and conditions carefully. It may charge you a fee each time you withdraw money from an ATM using it or when you check the card’s balance. You could also be subject to an inactivity fee, a reduction of the funds on the card due to a prolonged period of non-use. Do not agree to receiving your payment this way without first reading and understanding the card’s terms and conditions – doing so could cause you to lose money you earned, potentially to the point of your earnings being less than the legal minimum wage for your state.
Work with an Experienced La Crosse Employment Lawyer
It can be easy to be intimidated into simply accepting the terms your employer imposes on you, especially if you are threatened with termination for noncompliance. Never forget that you have certain rights in the workplace, including the right to receive your paychecks in a form other than a payroll card. For legal advice and representation in matters regarding your employment and compensation, work with one of the experienced employment lawyers at Moen Sheehan Meyer, Ltd. Contact our firm today to set up your initial consultation with us.