My company only offers direct deposit to certain employees. Is it legal for them to make that distinction?

[KateH85]

I’m located in California.

I would like direct deposit but my request as denied because I’m a 1099 contractor but the other W2 employees do have direct deposit. Is there a law that references if this is or isn’t legal? Please provide the law reference.

 

[cbg]

This is legal. It is legal not because a specific law gives them permission to make these distinctions - it is legal because no law says it is illegal.,

 

[stealth2]

I believe that, as a contractor, you are not actually an employee.

 

[FlyingRon]

I agree with Stealth, a contractor (1099-paid) is NOT an employee.

The next question is whether you, in fact, should be treated as an employee. If you are working directly for the guy paying you and he exerts sufficient control over you, then you are illegally being classified as a contractor.

 

[cbg]

Stealth is correct, of course. If you are a contractor and receiving a 1099, you are not an employee. Whether you are correctly classified is a moot point for the purpose of this question, however, since it is possible for a contractor to be paid by direct deposit. It is not, however, required, and it is absolutely legal for employees to be paid by direct deposit and not contractors. It is also legal for different classes of employee to be paid differently; if the employer wanted to pay the home office by direct deposit and not the branch offices, or to pay managers and above by direct deposit and not anyone below manager, or to pay the Accounting department by direct deposit and pay Research and Development by paper check, all of those divisions would be legal because no law says it cannot be done that way.

 

[Stephen1]

Could OP, as a contractor, require that his invoices be paid by direct deposit?

 

[LdiJ]

Could OP, as a contractor, require that his invoices be paid by direct deposit?

Well, he could, but only if he would be prepared to lose business if his customer declined to pay that way. Direct deposit for payroll is pretty simple for any large company and very simple for any company using a payroll service. Direct deposit for a contractor would tend to be a bit of a pain in the backside. Therefore there are companies who would decline to use a contractor's services if the contractor tried to insist upon direct deposit.

 

[cbg]

He could. And the employer could refuse to hire him.

Or, what LdiJ said.