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Thread: Mandatory Direct Deposit-Washington State

  1. #1

    Default Mandatory Direct Deposit-Washington State

    I was wondering what the law is for mandating direct deposit. The company is about half direct deposit and half get a regular check. We would like to make everyone do direct deposit. Is this possible?

  2. #2
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    In Washington, the employee does not have to authorize specifically direct deposit. However, the employee must not incur additional fees and must be able to choose the financial institution.

  3. #3

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    Is there any steps that a company needs to take, making sure the proper forms are signed by employees for the direct deposit etc...
    Thank you!!!
    JENN

  4. #4
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    The only exceptions that I can think of to this would have to do with bankruptcy. A bankruptcy court can order someone to have no bank account whatsoever. This situation is most common when an account holder has bounced checks and debits, the bank pays them, and the account holder doesn't repay the bank, and goes and files for bankruptcy protection. There is also a law in my state, Louisiana, that you cannot discriminate against someone for having a bankruptcy. In LA and many other states, we are perfectly within our legal rights to require all employees to have an account as a requirement for employment EXCEPT those who have an order stating otherwise from a bankruptcy court.

    I have been successful at convincing the Chapter 7 trustee in my area, but not the Chapter 13 trustee, of allowing employees such employees to have a direct deposit only account that is offered as a product by one of the local banks. The account is an ATM only account. There are no debit cards, credit cards, or checks. The employee is allowed two free ATM withdrawals at their bank for every direct deposit. Of course, they are charged a nominal monthly fee for having the account, and other banks and network ATM's charge a fee for using them.

    Other than the bankruptcy thing, I don't see a problem with requiring all employees going to direct deposit.

    As far as an additional form goes, yes, there does need to be one which specifically states the conditions of the agreement, and asks them to attach an original bank document, a copy of a deposit passbook, or a letter from the financial institution with the ABA routing number and account number. The reason for this is that you want to be certain that the funds for this employee are going into an account with that employee's name on it, and not an account that belongs exclusively to someone else.
    Last edited by bears00; 12-30-2005 at 12:54 PM.

  5. #5

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    Thank you all for your information!! It was very helpful! (my first time on this site, y'all are quick on replies! its great!!)
    Have a Happy New Year!
    JENN

  6. #6
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    Jenn, here is an excellent website for this:
    http://www.directdeposit.org/

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