Friday, August 12, 2011

Paying employees with payroll cards

With the rising popularity of wage and payroll direct deposit less employees receive paper "Content" pay run today than ever before.

But there are a group of employees to be paid via direct deposit, for the simple reason can not, that they not bank accounts. Part-time jobs are usually low-wage and blue collar workers as well as high school students work after school.

This can be costly for the employer and employee. For employers the output of paper of paychecks is typically more expensive than the direct payments, especially if only a few employees must receive checks. And unbanked people end often go for check cashing company or alcohol stores to win their salaries, which can charge as much as $20 for the service.

An increasingly popular solution to this problem is unbanked people with a wage and pay payroll card. Employers make direct deposits into special accounts at banks, which are set up for these employees, who then can access their money at an ATM using a stored wage and payroll card. The cards can also be used to make purchases at retailers. Employees can write not checks on the accounts however.

When you staff population have a large workers or low-wage, and many of them have bank accounts, payroll cards payroll you could these employees with a valuable benefit at the same time reduce your payroll and processing costs can provide payroll. Here are a few guidelines, which in mind keep alternative if you are this wage and payroll:

Use of insured institutions: Salary - and payroll card services are provided primarily by banks, but non-bank institutions offer these services. Some experts recommend banks stick with FDIC insured as this will provide, shouldn't protect the institution. If a non-insurance institution fails, your employees could lose all the numbers that is remaining on their maps, and could you for, from which the losses be liable. Clarify fees: Service providers charge a variety of different fees for wage and payroll cards, including point of sale and ATM transaction fees, monthly fees, card replacement fees and load fees. Try or buy around to find an institution with the lowest fees, negotiate discounts. In addition, you may want, that to pay to promote to employees even your unbanked staff to rated. Ensure consumer protection: Make sure that your payroll and payroll-show contract provides employees with the same protection against fraud, theft and error, the bank debit card holders of the electronic funds transfer Act and Federal Regulation E. available provided be during visa and MasterCard voluntary offer "Zero liability" policies, not them all to cover the circumstances covered by federal laws. Get written consent of employees: Employees must be specified after receipt of payment via a paper check, direct deposit or a pay and payroll card a choice; You can deal with does not undertake paid a bank. Provide employees with a written disclosure, which States the terms and conditions of the individual options (including fees), and they have signs a consent format to select their preferred option. Note that wages of electronic cash transfer received approval, whether pay and payroll direct deposit or one pay and payroll card may not condition the rental or continued employment.

Don Sadler is a freelance writer and editor specializing in economic and financial affairs.


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