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Direct deposit is overrated
July 7, 2009 3:31 PM   Subscribe

Is my employer allowed to insist that I get paid through direct deposit? I live in California.
posted by aniola to Work & Money (19 answers total)
 
i've worked for a number of companies that have STRONGLY DISCOURAGED the usage of paper checks by not making it clear that an option other than direct deposit exists & making the process to get a paper check something that had to be manually done every pay cycle, but i do not know if they are legally able to demand you have a bank account to get paid.

have you consulted HR yet to see what other options they can offer? if not, talk to them first.
posted by radiosilents at 3:44 PM on July 7, 2009 [1 favorite]


IANAL, but California is an "at-will" state, meaning you can quit or be fired at any time for any non-discriminatory reason absent a contract specifying a specific length of service. So, they can pretty much say that direct deposit is a requirement for the job, as far as I know. This seems to be a pretty common rule in the last few years.
posted by bluejayk at 3:46 PM on July 7, 2009


for any non-discriminatory reason

there are also about 100 years of labor law to follow
posted by @troy at 4:07 PM on July 7, 2009


IANAL, but California is an "at-will" state, meaning you can quit or be fired at any time for any non-discriminatory reason absent a contract specifying a specific length of service. So, they can pretty much say that direct deposit is a requirement for the job, as far as I know. This seems to be a pretty common rule in the last few years.
posted by bluejayk at 3:46 PM on July 7


You DEFINITELY aren't a lawyer. I don't mean to rag on you, but just because a state is an "at-will" state doesn't mean someone can fire someone for wearing a blue shirt or not taking direct deposit. Please learn your terms before defining them for someone else.

Look of California Labor Code 213(which refers to 212). Employers may pay by direct deposit but ONLY if employees authorize such deposits. If you don't want your employer to know your routing and account numbers...thats understandable.

Your employer CANNOT REQUIRE that. I am NOT a lawyer, but have seen this issue before as a labor organizer. Your employer is wrong here...at least in California.
posted by hal_c_on at 4:09 PM on July 7, 2009


Reading your question again....yes your employer can "INSIST" that you get paid by direct deposit, but it cannot REQUIRE it.
posted by hal_c_on at 4:11 PM on July 7, 2009


hal_c_on, I'm pretty sure you're wrong on both points, unless the government of California has different rules for its own employees.

* "At will" certainly does mean you can be fired for wearing a blue shirt. That's the very definition of at will: you can be fired for ANY reason (apart from race, gender, religion, etc: there has to be a specific statute to point to). An "at will" job is not an entitlement so there are not even any due process rights when you're dealing with the government. Blue shirt, no problem.

* Again: "at will" doesn't just mean you can be fired for any reason, it means you can be fired with no explanation at all, and you're not entitled to one.

* They can indeed fire you for not taking direct deposit if you're at will. They can fire you for any reason, without notice or explanation. If they owe you money when you're fired, sure, they'll have to cut a check or give you a bag of pennies or something.
posted by yesno at 4:30 PM on July 7, 2009


1. "At-will" employment is the standard for 49 of the 50 states that comprise the United States. (Montana requires termination be for "good cause".)

2. A California-based employer cannot obligate you to receive wages via direct deposit.


You DEFINITELY aren't a lawyer. I don't mean to rag on you, but just because a state is an "at-will" state doesn't mean someone can fire someone for wearing a blue shirt or not taking direct deposit. Please learn your terms before defining them for someone else.


Hal_c_on, you absolutely can be fired for wearing a blue shirt in a non-contract employment situation, in most municipalities. You can be fired for just about any damn thing (assuming you are not being discriminated against for your age, race, gender, national origin, sexual orientation (some places), etc.) and as an organizer you should know that.

Just for kicks google "fired for wearing a packers shirt".
posted by RajahKing at 4:30 PM on July 7, 2009


For some reason I thought you worked for the state.

Anyway, all the cases about getting rid of at will status are based on some kind of implied contract. You don't want to go there.
posted by yesno at 4:34 PM on July 7, 2009


California apparently does not allow companies to compel direct deposit. Employees must voluntarily authorize that process.

As a payroll administrator (whose pay is direct deposited), I'd disagree that direct deposit is overrated, but not all of our employees use the service either. There's something to be said for choice.
posted by contrariwise at 4:39 PM on July 7, 2009


Thanks folks! It wouldn't come down to the at-will aspect of things; I'm not willing to lose my job over this, I work for good folks. I'm glad to know that there is a labor law about this, and now I will feel legitimate in trying to have a conversation with my employer and hopefully working something out that will work for the both of us.
posted by aniola at 5:04 PM on July 7, 2009


Direct deposit has to be voluntary, yes. That means employers are not permitted to just put money in your account without your authorization.

But that doesn't mean you can't be fired for not voluntary agreeing to direct deposit.

Again, YOU CAN BE FIRED FOR ANY REASON if you're at will, including for refusing to participate in direct deposit.
posted by yesno at 5:06 PM on July 7, 2009


Curious: What are the reasons you wouldn't want direct deposit?

If you're concerned about your employer knowing about your bank accounts, what I have is a checking account with a bank (that happens to have a very nice web interface for initiating ACH transfers) that I'm otherwise unaffiliated with for incoming money. DD saves me a lot of time and is much more reliable and easier to self-audit than a bunch of old-timey paper checks.
posted by floam at 5:15 PM on July 7, 2009


Lots of disinformation going on in this thread. "At-will" is a little more complex than saying you can / cannot get fired for wearing a blue shirt, and it has nothing to do with the question at hand.

It appears that Section 213 of the California Labor Code is more convoluted than I expected, but it seems to say that employees have to voluntarily authorize direct deposits. This is a reasonable interpretation, as requiring direct deposits would also require you to have a bank account, which seems unreasonable, and such a policy could be used to fraudulently deny employees of paychecks. Labor Codes are generally drafted to protect employees from getting screwed by their employers.

A DLSE letter (MS Word doc) appears to be saying the same. Try calling the local California Labor Commissioner; they will have a real answer for you.

In addition to the fact that employers cannot fire you based on age, race, gender, national origin, sexual orientation, they also cannot fire you for asserting your legal rights. Like if you say that you have a right to lunch breaks and demand them, they can't fire you for that.
posted by jabberjaw at 5:21 PM on July 7, 2009


floam:

For me, it's just more trouble than it's worth. I enjoy the process of picking the check up and taking it to the bank. I'm more likely to carefully examine my paystub if I have the physical check in hand. And when they overpay me, I don't want to have to take money out of my bank account, I want to be able to just give them the check back and have them re-cut it.
posted by aniola at 5:23 PM on July 7, 2009


May I ask why you object to direct deposit? To me it always seemed like a benefit - the $$ would show up in my account days before I could get a paper check to the bank once it was issued, and it never failed to get there in over years. Plus both companies and banks are trying to cut down processing costs through electronic transfers. All that seemed good for everyone to me. At first, I seem to remember fearing "losing control" but I soon got over that. I've done it with paychecks, tax refunds, Social Security payments, and pension checks, and would never go back to trips to the bank if I ould avoid it.
posted by path at 5:37 PM on July 7, 2009


Looking at your reasoning, two things occurred to me: Do you realize that when you have direct deposit, you still get a copy of your paystub, which looks almost exactly like a check? Are you anticipating being overpaid often? I would think that would be a pretty rare occurrence. Of course, if you don't want direct deposit that's your call, but in my experience, it makes life easier for everyone.
posted by katemcd at 5:50 PM on July 7, 2009


Well, a lot depends on how dependable the company is. My husband has had direct deposit with his company and at times it has been an utter nightmare.
posted by St. Alia of the Bunnies at 6:56 PM on July 7, 2009


Labor laws protect people from being denied the pay that they have earned. I can't say much about California but in Connecticut we cannot compel people to use direct deposit either. We also cannot deny someone their rightful pay for refusing to voluntarily sign a direct deposit form.

We do provide stubs to everyone that include a record of the current transaction as well as all YTD balances. On the rare occasion that someone is overpaid, we honestly make every effort to correct the error in whatever way is least disruptive to the employee since it is rarely as a result of something they've done.

Our checks are also printed out of state and FedExed to our locations. During Hurricane Katrina, our direct deposit people were paid promptly and the live check employees had to wait an additional day before the planes went up again.

As I mentioned, we do have a number of employees who prefer a live check and they seem to have very specific reasons for feeling that way. As much as live checks can be a bit of a nuisance to a payroll department (they get lost, go uncashed) I think it's a good thing that our employees have the choice to handle their money in whatever way they find comfortable. The convenience factor apparently isn't critical to everyone.
posted by contrariwise at 7:10 PM on July 7, 2009


Pretty much everyone in this thread is conflating to very different issues. Those issues are:

1. Whether or not the company can force you to take money you have rightfully earned via direct deposit.

and

2. Whether the employer may fire you for refusing to sign up for direct deposit for future earnings.

With respect to #1, you don't get screwed out of a paycheck just because you don't want to take direct deposit.They still have to pay you. That doesn't mean that the company cannot require you to authorize direct deposit.

Several folks have pointed to sections 212-3 of the California Labor Code as saying that employers cannot require direct deposit. I don't know what case law exists on point, but neither of those statutes, by themselves, mean what the above posters are suggesting.

They say only one thing (on this topic): that an employer cannot deposit money into your bank account without your authorization. That does not mean that they can't make said authorization a prerequisite for continued employment.

An employer cannot hold you down and forcibly dress you in the company uniform -- that doesn't mean you can't be fired for failing to put it on yourself.

Basically the only good advice in this thread is to call the Dept. of Labor / Labor Commissioner and get an answer from the state. When you call, be sure to explain as clearly as possible that you're talking about the second issue above, not the first. If it turns out that requiring direct deposit is illegal, be sure to find out what your recourse is and what the consequences are for the employer.

Until you know what the penalties are, you really don't know if it being "illegal" means anything.
posted by toomuchpete at 7:46 PM on July 7, 2009


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