Payroll Card Backlash: Employers Should Consider Risks Carefully

Over the last several years, employers have increasingly adopted the practice of paying employees through payroll debit cards. The driving force behind this trend appears to be the lower costs associated with such debit cards as opposed to the cost of issuing paper checks. As a result, this payroll practice has nearly doubled since 2010.  

On the surface, the system is fairly straightforward. Employers issue the cards to employees and deposit their wages on the card each period. The card can then be used like a debit card: the employee can make purchases with it or withdraw money from an ATM. 

However, there is a growing backlash against this practice, with resistance coming from employees and government regulators alike. Therefore, employers must carefully consider the risks of adopting such a practice in the future.