View Full Version : can a company charge you a service fee for your own paycheck? Virginia

10-27-2007, 04:57 AM
My husband just started a new job 2 weeks ago and came home today with two paystubs. I noticed on the stub that there is a Direct Deposit fee of $1.00. I asked him, "They CHARGE you for Direct Deposit?!" He said, "Well, if I had asked for a check, the fee was $3.00." I scoffed and commented, "Well if they pay you in cash, is that free?" I am really surprised at this. I have known companies to charge for a paycheck, but no fee for Direct Deposit, assuming that is encouragement to sign up for direct deposit as it is easier to process for payroll. But can a company REALLY charge you to get paid? He gets paid weekly-so this will end up costing us $52 over the course of the year.

10-27-2007, 07:30 AM
Nope. First of all, Virginia requires written authorization for deductions from paychecks for amounts not required by law, like taxes, child support, etc.

What deductions can be made from an employee's wages?
The only deductions allowed are 1) payroll, wage or withholding taxes, and deductions otherwise authorized by law, and 2) those amounts authorized to be deducted by written and signed authorization of the employee. The authorization must be truly voluntary and not signed as a condition of employment. Virginia Code 40.1-29(C). (emphasis mine)

Your husband can file a claim with the state Dept. of Labor for the unauthorized deductions.

Note: this signifies a cheap employer. Paying employees is a cost of doing business. If the employer can't even absorb that, you wonder how else he's going to "put it to" the employees.:mad:

10-27-2007, 09:48 AM
What choice would he have? So if he signed a paper when signing up for direct deposit and was informed that there is a dollar charge, then that is OK.

Since they informed him, that makes it OK? He doesn't remember what he signed-first day, they throw so many forms at you. I will suggest he go back to HR and look at it.

Yes, a cheap employer. In their defense, it is a very small local company-they probably don't know better.

10-28-2007, 03:02 PM
I don't disagree that if he wanted this job, he apparently had to "agree". But this is the exactly what the underlined phrase in the cite refers to. Such a deduction is unlawful under Virginia statutes.

10-28-2007, 07:43 PM
So the only things allowed to be deducted are: "payroll, wage or withholding taxes, and deductions otherwise authorized by law".

Deductions otherwise authorized by law could be something that the employee agrees to. For example, at my company, we can get interest-free loans for the purchase of a computer. I bought a $1500 Dell laptop, I signed a contract with my employer to pay it back in equal installments, taken out of my paycheck until the loan is paid off within one year. So every paycheck, there is a aprox. $60 deduction.

But lets say an employer says, "you must pay an electric charge each month to help pay for the electricity that powers the light in your cube". So you agree to a $5 per pay-period deduction out of each paycheck. You sign a paper that says OK. This is wrong (nevermind nuts-just an overexaggerated example) in and of itself because it is not payroll, wage or witholding taxes, or other allowed dediction, and not OK because the employee agreed to it.

Like the cost of cutting a check, electricity is a cost of doing business, and should not be passed on to the employee.

What about employers who say, $1 for a check, but direct deposit is free. Just curious, because we have run into that too.

I really would LOVE to see what they would do if he went back in there and said, "I really disagree with this charge to be paid, so I would like to be paid in cash each week".

10-29-2007, 03:36 AM
"Deductions required by law" are taxes, child support, tax levies, student loan garnishments, and garnishments ordered by the court. Period. Anything else requires written voluntary authorization from the employee. Period. Just because an employee "authorizes" a deduction does NOT make it a "deduction required by law".

All I can tell you is what the law says. This is an unlawful deduction because the authorization was given because it was required as a condition of employment. He can choose to file a complaint with the state DOL or live with it. I don't know what else to tell you.

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