Is Direct Deposit Putting You at Risk?

"It's my money and I need it now!" Perhaps you recognize this phrase from a popular television commercial. Instant gratification is something that many people feel on a regular basis, especially on pay day. The idea of picking up a paper paycheck on a Friday, driving to the bank, then waiting 3 days for the funds to clear is a thing of the past. Direct deposit has become the new normal.

Why this is important

So, employers should mandate their employees to have direct deposit then, right? Wrong. Though employers might prefer, or even expect that every employee will sign up for direct deposit, employees have every right to request a paper paycheck. Employers cannot urge or require that an employee enrolls in direct deposit.

California employers must provide easily accessible wage statements every pay cycle. What exactly does "easily accessible" mean? Employees should be able to download from a secure website and print previous wage statements at any time with no cost to them. The wage statements should be accessible from a work computer or a personal computer. For companies that do not have online access, printed copies are also acceptable.

A bit more about wage statements

Each wage statement, whether downloaded online or hand delivered, must include 9 specific pieces of information to be compliant with Labor Code 226. The Healthy Workplace Healthy Family Act of 2014 also requires employers to provide employees with their sick leave balance on each pay day, frequently included on the wage statement.

As part of our onsite HR practices review, we examine current wage statements for compliance. Contact a consultant if you have questions.