Paying Employees By Debit Card May Be A Problem

Nowadays, many employers are not giving employees paper checks. Nowadays, people usually/often get direct deposit although many states mandate that an employer cannot compel employees to accept direct deposit. To cut down on problems and potential thefts, etc, many employers have recently gone to paying employees with debit cards, analogous to the “gift cards” that many of us give and receive for different occasions.

Now, the New York Attorney General has asked for information from Wal-Mart, Home Depot and other employers about this increasingly “popular” employer practice, to ascertain the legality of the practice.  This is because if bank fees or charges are assessed, this would mean employees were not getting their wages in full, free and clear, and this could therefore lead to suits against the employers and the banks.