Direct Deposit Requirements

[NancyDrew28]

What is the name of your state? Texas

We have been having a problem with employees copying company paychecks and cashing them. We are wanting to do away with manual checks all together and implement a policy that requires employees to do direct deposit.
Is there any type of law that prohibits us as an employer from doing that? We offer Free Checking Accounts for those who do not have an account, plus we have a set up with a local credit union. This way folks will have alternatives.

Thanks

 

[cbg]

Only a VERY few states allow mandatory direct deposit, and according to my source Texas is not one of them.

Unless someone else (Patty, perhaps) can confirm one way or the other, check with your state DOL to be certain.

 

[Veronica1228]

What is the name of your state? Texas

We have been having a problem with employees copying company paychecks and cashing them. We are wanting to do away with manual checks all together and implement a policy that requires employees to do direct deposit.
Is there any type of law that prohibits us as an employer from doing that? We offer Free Checking Accounts for those who do not have an account, plus we have a set up with a local credit union. This way folks will have alternatives.

Thanks

I don't know about the mandatory rules (as cbg says, Patty might) but most banks offer treasury management products to prevent fraud of this nature. Positive Pay is the first thing that comes to mind. Contact your bank and speak with your Relationship Manager, Account Officer, or Treasury Management Sales Consultant to see what they can suggest in case you find out that you can't make Direct Deposit mandatory.