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  • Mandatory Direct Deposit? Ohio

    Is it legal to force employees to receive pay via direct deposit to a bank?

  • #2
    My notes on this are not current. But the rules used to be (and likely still are) as follows:

    Employers can mandate that employees be paid by direct deposit to a financial institution of each employee's choice (Federal Reserve Board Regulation E, Sec. 205.10(e)(2)).

    That is just vanilla federal law. Assuming that OH still basically has no rules, then we have minimal federal rules on the subject. The problem is that there are also something called "pay day" rules, which tend to be state specific. Unless OH rules specifically say otherwise, employers are likely required to pay employees in a timely manner, and in theory, by refusing to give the employer the bank information they (the employee) can try to force the employer to pay via checks. The problem is that while the employer cannot legally hold back wages (unless state law says they can), the employer (generally) can fire the employee for refusing to sign up for direct deposit. What is sometimes called a "condition of employment" argument.

    I am not expert on OH law, regulations and court decisions. This sort of stuff is VERY state specific. But based on what I know (that is not current), OH tends to be a "just like federal" state, and the feds mostly do not care about this. The "direct deposit as a condition of employment" is an argument, not a law in most states. If it is legal, it is legal because there is no law saying that it is not legal (in most states).
    "Reality is that which, when you stop believing in it, doesn't go away".
    Philip K. **** (1928-1982)

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    • #3
      Per my reference 1-2011, Ohio still does not have a law re DD or payroll cards.
      Too often we underestimate the power of a touch, a smile, a kind word, a listening ear, an honest compliment, or the smallest act of caring, all of which have the potential to turn a life around. Leo Buscaglia

      Live in peace with animals. Animals bring love to our hearts and warmth to our souls.

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      • #4
        Agreed with the above. And I know this does not pertain to the question, but I will never understand the opposition to DD.

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        • #5
          There are some people who just don't trust banks or just like a paper check.
          (I know some.)
          Too often we underestimate the power of a touch, a smile, a kind word, a listening ear, an honest compliment, or the smallest act of caring, all of which have the potential to turn a life around. Leo Buscaglia

          Live in peace with animals. Animals bring love to our hearts and warmth to our souls.

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          • #6
            Well then those people need to get with the times, or they are SOL. I have this conversation all the time (it really irks me), and I see no valid reason for refusing to have a bank account.

            You don't trust banks, but you trust "Joe's Check Cashing and Bail Bonds?" Please.

            If you don't trust banks, get an account to recieve your DD paycheck, then take it out that day and carry the cash around with you. Either that or go back in time and get a job in 1953.

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            • #7
              Originally posted by Betty3 View Post
              There are some people who just don't trust banks or just like a paper check.
              (I know some.)
              There are others that have problems with identity theft, or legal judgments, and currently are unable to get a bank account.

              I opened an account that my daughter and ex wife can use to have direct deposits made into. (both identity theft victims) Some places will not make a DD unless the payees name is on the account.

              I wish my current employer would make the adjustment to DD.

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              • #8
                If you aren't a US citizen, such as those on visas, it can be very difficult to get a US bank account. Good luck getting DD to go to a foreign bank post Patriot Act.

                Absent any of those issues, I agree with you. Just freaking get DD and be done with it. No checks to lose. No having to arrange for someone to pick up and deposit your check if you are sick or on vacation on pay day. One less errand to run. No need to worry about what time the bank closes or if they have weekend hours. Much easier for the employer too.
                I post with the full knowledge and support of my employer, though the opinions rendered are my own and not necessarily representative of their position. In other words, I'm a free agent.

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                • #9
                  I am always fine with employees using direct deposit. But a certain percentage of the workforce are wackos. Past that, some employees really do have a good reason that generally is none of the employer's business.

                  A very few state's allow the employer to coerce the employee into direct deposits by withholding due wages payable. A very few. Most states do not. I worked in CA (a very no coercion state). I worked for an employer large enough to basically have an in house credit union. We could pretty much guarantee a bank account to any employee. We very actively "sold" direct deposit month after month for several years, not just to employees, but to vendors. Out of a workforce of several thousand, we had all but 50 employees on direct deposit. I (politely) talked to every one of those 50 people, and these folks were not just "no direct deposit", but more like "[email protected]#$^ no direct deposit, you ^%#@$". Several of the people who did talk to me had some really good reason. Others just had reasons (hiding money from spouses for example).

                  But IMO this is one of those conversations that you will not win. It does not matter if you are right. And you might not be. One employee I talked to told me that if she signed up for direct deposit, her ex would find her and kill her. IMO, a good reason to not sign up. I told HR, who told me to forget the conversation occurred. She quit a few months later and several week later her ex should up looking for her. He trashed the lobby and got arrested. HR later told me to give them the W-2 and they would see that she got it (meaning no address in our system).
                  "Reality is that which, when you stop believing in it, doesn't go away".
                  Philip K. **** (1928-1982)

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                  • #10
                    I can speak to the downside of not having DD. My company's payroll comes to my Boston office and I Fedex the checks and pay vouchers to sites in 7 states. In the fall each year I send reminders to those who don't use DD that if the Fedex is delayed the company will be unable to advance money to employees.

                    This past winter Fedex was delayed to Houston due to storms. One site took a week to get their Fedex. The one employee on site who was receiving a check was very unhappy and called me ranting. However I explained the company fulfilled their legal responsibilities and he would have to wait for the Fedex to be delivered.

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                    • #11
                      At my former employer we also used to fedex paychecks every payroll run to Texas, Florida and San Francisco. Same issue as HRin MA, due to weather our FL employees did not get their checks for Christmas, a big stink was made yet they all knew what would happen. The bad thing is no one learned from this and 1 month later, the same upset employees were calling and screaming profanities and threatening me. Those few employees were terminated and guess what, several signed up for DD right after that.
                      Oh, and the bank was directly across the street from the warehouse.

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                      • #12
                        In the 1980s I worked for a manufacturing company. We had a number of facilities, including one in Reno, NV. I had to maintain a separate NV bank account for the sole purpose of paying those people. We had very low direct deposit rates in Reno. When I asked, I found out that this was because the casinos would not only cash local checks free but would hand out free drink coupons to people who did so. Meaning we had our entire workforce heading over to the casinos to cash (and spend) their checks. Strange place. I would go there once a year for audits and the slot machines are pretty much everywhere. Not just the casinos.

                        There are always reasons to want to be paid by check. There are also reason to handle all cash related transactions out of a state with no nearby casinos.
                        "Reality is that which, when you stop believing in it, doesn't go away".
                        Philip K. **** (1928-1982)

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                        • #13
                          I worked in Reno periodically several years ago. I found it very strange to see people playing slots in grocery stores of all places. It seemed as if the stores would give you a couple of dollars change in quarters just for the machines.

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                          • #14
                            I wonder how many people used their grocery/food money to play the slots.
                            Too often we underestimate the power of a touch, a smile, a kind word, a listening ear, an honest compliment, or the smallest act of caring, all of which have the potential to turn a life around. Leo Buscaglia

                            Live in peace with animals. Animals bring love to our hearts and warmth to our souls.

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                            • #15
                              There used to be a gentlemen club in the Los Angeles area that would cash paychecks. When the city ordinance was changed to prohibit that, many employees went on DD

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