One
of the many challenge often faced by both employers and employees is providing
reasonable pay options for those workers who are either unbanked or underbanked
and thus cannot benefit from direct deposits. Current estimates indicate that
roughly 26.9% of the current US population (approximately 33.5 million
households) are unbanked or underbanked.1 The term “unbanked” refers to
individuals who do not have any Bay Village payroll services from a financial institution
usually by choice or because the individual may live paycheck to paycheck and
not be able to maintain the required minimum balance for an account. Those categorized as underbanked either live
in more rural areas with insufficient access to banking institutions or have
trouble meeting underwriting criteria to qualify for bank accounts. Both
scenarios can be costly for employers and employees with fees for
check-cashing, having cashier’s checks issued to make household payments and/or
cancellation and reprints of lost checks.
Paper checks also carry higher risks for theft of the checks themselves
and/or stolen cash once an employee cashes his/her check.
Bay Village payroll services are a solution that have been gaining popularity with employers as a
means to serve their employees that currently lack service from financial
institutions. These cards offer greater
convenience and security than paper paychecks and can help workers avoid steep
and sometimes predatory fees at payday loan retailers that often take advantage
of workers needing immediate access their own hard-earned money. For those households already living
paycheck-to-paycheck, those fees can have a detrimental effect and eat into an
employee’s ability to provide for basic household needs. Payroll services can
be a great option to give employees instant access to their pay including the
ability to make point-of-sale transactions, online bill payments and complete
purchases at brick-and-mortar stores or online retailers. Employers must follow
strict guidelines in order to stay in compliance in Payroll services with both
federal and state laws to protect vulnerable employees and should promote the
benefits for your workforce to maximize enrollment efforts. Employers must
follow a specific protocol when they are looking to roll out a payroll card
option to their workforce including the need for them to opt-in (you cannot
automatically enroll employees), but you can also use the opportunity to set an
enrollment goal and encourage more employees to participate.
Once
in place, employers also need to ensure they follow the letter of the law with
regard to permitting to employees to access their money. It is imperative that you ensure you payroll
card provider meets the following requirements in order for your company to
stay in compliance with labor laws. Payroll services solutions proudly offers a
payroll card solution that meets all of these requirements, which we feel is a
vital layer of service to ensure we meet the needs of all our clients and their
employees. Employees should not incur any fees if they wish to access their
entire paycheck. Reimbursement of fees
to access their pay after the fact is not acceptable under New Hampshire law,
thus employers should ensure employees have a way to circumvent incurring the
fees or should make arrangements with the payroll card provider to have those
fees passed directly to the employer.
