Payroll cards allow employees to avoid these costs and provide entry to the financial mainstream.įinally, electronic wage payment demonstrates employers’ and employees’ environmental commitment. They incur high fees when cashing payroll checks and then additional costs when paying bills using money orders or traveling to a payment location to pay cash. families are without checking or savings accounts. Studies show that 10 million to 12 million U.S. They do not have to run to the bank to cash or deposit paychecks, can use their cards to make purchases-online and in person-and, depending on the program, can access wages from a number of sources, some available around the clock.Įmployees without bank accounts benefit significantly from payroll cards.
Employees can access wages immediately on payday, even when out of the office. Electronic payment methods provide employees with access to wages in a far safer, more secure and less expensive way than traditional paper paychecks. Paperless pay allows employers to deliver wages to employees in a timely manner and to comply with statutory requirements, even when faced with unexpected obstacles.Īs an added benefit, HR professionals usually see an increase in direct deposit enrollment when they roll out paperless pay.Įmployees benefit from the convenience of paperless pay. Many employers also have difficulty delivering wages during inclement weather or natural disasters. This can be difficult, if not impossible, when terminations are unexpected. For example, several states require employers to pay final wages immediately upon termination. Paperless pay also eases compliance with strict wage payment statutes. Agency officials also estimate that it costs $8 to $10 to replace a lost or stolen paycheck and that approximately 4 million paychecks are lost or stolen each year. The Comptroller of the Currency estimates that employers can save approximately $2 per paycheck when they pay employees electronically. Paperless pay eliminates expenses associated with printing, processing and delivering paper paychecks. For employers, the benefits are largely financial and administrative. Offering employees a choice between direct deposit and payroll cards can resolve these issues because every employee can participate.Įmployers and employees both benefit significantly from paperless wage payment.
Because "unbanked" workers tend to come from protected minority groups, wage payment programs requiring direct deposit may run afoul of federal and state anti-discrimination statutes. Moreover, a surprisingly large number of employees do not have savings or checking accounts. A payroll card is a prepaid, reloadable card issued by a national or regional bank on behalf of an employer.Īlthough most employers would like to compensate employees using direct deposit alone, many states prohibit mandatory deposit directly into an employee’s personal bank account. Paperless wage payment eliminates traditional paper paychecks by giving employees the choice of receiving wages by direct deposit or payroll cards. One way to achieve this goal benefits employees, employers and the environment: paperless wage payment. In a turbulent economy, employers are looking for ways to cut costs without reducing their workforces.
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