Employees pay payroll card

With the growing popularity of direct deposit of payroll, fewer employees now receive a "paycheck" role on the day of payment than ever before.

But there is a group of employees that can not pay via direct deposit, for the simple reason that they do not have bank accounts. These are usually the workers low wages and worker, as well as high school students working part-time jobs after school.

This can be costly for the employer and the employee. For entrepreneurs, issuing paper checks is generally more expensive than direct deposit, especially if only a few employees need to receive checks. And obtaining employees often end up checking of companies or liquor stores to collect their salaries, which can carry up to 20 dollars for the service.

An increasingly popular solution to this problem is to pay employees obtaining a payroll card. Employers make direct deposits in special accounts in financial institutions that are configured for those employees who have access to your money at ATMs, using a list of stored value card. Cards can also be used to make purchases at retail shops. Employees not can write checks on the accounts, however.

If you have a large blue-collar or population of low-wage employees, and many of them do not have bank accounts, payroll cards could allow facilitate these employees a valuable benefit, and also reduce its payroll processing costs. Below are some guidelines to keep in mind if you're considering this alternative Payroll:

Use insured institutions: Payroll card services are mainly banks and nonbank institutions also provide these services. Some experts recommend staying with FDIC insured banks because this will provide protection if the failure of the institution. If an error occurs in a noninsured institution, its employees could lose any payment falls on the cards, which could be to compensate for the losses. Clarify the tariffs: Service providers charge a variety of payroll cards rates, including rates of ATM transaction, monthly fees, replacement card fares and cargo rates and points of sale. Compare to an institution with rates lowest or try to negotiate tariff reductions. Also, consider the possibility of paying the fees assessed to employees to encourage their procurement employees to participate. Guarantee of consumer protection: Make sure that your payroll card option provides employees with the same protections against fraud, theft and error provided to the holders of debit card bank electronic transfer of funds and federal e. law regulation while Visa and MasterCard offer voluntary "zero liability" policies, which do not cover all the cases envisaged by federal laws. Obtain consent in writing of employees: Employees should have an option to receive the payment through a check for paper, direct deposit or payroll card. It is not necessary to deal with a bank to receive payment. Provide employees with a written disclosure which establishes the terms and conditions of each option (including costs) which sign a consent form to choose your preferred option. Please note that the consent to receive wages by means of electronic transfer of funds, if the direct deposit of payroll or a payroll card can not be a condition of employment or rental.

Don sadler is a writer and editor specializing in business and finance.

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