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Is Forced Direct Deposit Legal?

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  • Is Forced Direct Deposit Legal?

    Can an employer in Mass require employees to have direct deposit? I have gotten mixed answers from the Attorney Generals office and then I read something in the Globe this weekend saying that it is NOT legal.

    Thanks

  • #2
    Yes, I saw that in the Globe too, and it confused me because the AG's office told my business partner that it WAS legal. So I guess I'm in the same place you are.

    Phil? Any insights?
    The above answer, whatever it is, assumes that no legally binding and enforceable contract or CBA says otherwise. If it does, then the terms of the contract or CBA apply.

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    • #3
      I'm not Phil, but my cheat sheet says the only requirement is that the employee must choose the financial institution. It does not state that the employee must either authorize the program, nor incur any added fees.
      I don't respond to Private Messages unless the moderator specifically refers you to me for that purpose. Thank you.

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      • #4
        That was my understanding as well but when a "well-respected" newspaper such as the Boston Globe says differently, it makes you wonder.

        Thanks

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        • #5
          The Globe is only as good as their fact-checker. I know that at the time my business partner talked to the AG's office, it was a "recently enacted" law, which says to me (based on when she talked to them) that it's probably only been legal for a year or two, assuming that it is legal. The Globe fact-checker may have been working from outdated info.

          I'll see if I can find her report on this issue, on another board where we both post.
          The above answer, whatever it is, assumes that no legally binding and enforceable contract or CBA says otherwise. If it does, then the terms of the contract or CBA apply.

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          • #6
            It could be outdated but here is the article:

            http://bostonworks.boston.com/globe/job_doc/


            ....and the law it discusses:

            http://www.mass.gov/legis/laws/mgl/167b-7.htm

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            • #7
              I saw the article, Patrick.

              Here is the discussion from the other board that I recalled. It's even more recent than I thought - from August of last year. The poster Donna is my business partner.

              http://www.ahipubs.com/ubb/Forum1/HTML/010879.html
              The above answer, whatever it is, assumes that no legally binding and enforceable contract or CBA says otherwise. If it does, then the terms of the contract or CBA apply.

              Comment


              • #8
                Thanks - you are right, we can require it. I have just stirred things up over at the Attorney Generals office with the Globe. They wanted to know who wrote the article and where they could take a look at it.

                They stated, as we originally thought, that employers CAN require direct deposit as long as it doesn't cost the employee anything, and, as long as the employee can choose the bank institution.

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                • #9
                  Good for you. THanks for the confirmation.
                  The above answer, whatever it is, assumes that no legally binding and enforceable contract or CBA says otherwise. If it does, then the terms of the contract or CBA apply.

                  Comment


                  • #10
                    As I understand the laws applying to direct deposit: Federal law is silent on the matter, dealing only with the issue of allowing employees choosing their own banking institution. I also understand that many states require an employee's consent before using direct deposit, although at least 10 states specifically allow companies to force employees to take funds by direct deposit.

                    MA state law seems to approach this in the same manner as Federal law - with silence. But I'd be willing to bet that courts would permit it so long as the employees were able to choose their own institution, there was no additional cost, and the employee couldn't demonstrate any other hardship.
                    This post is by Philip Gordon, a Massachusetts employment attorney (www.gordonllp.com).

                    This post is NOT legal advice. It is for general/educational information purposes only. You should not rely on this post if you are making decisions, and it does not create an attorney-client relationship. This post may be considered "advertising" under the MA professional rules for attorneys.

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