How Do You Pay Employees? Cards, Checks or Direct Deposit?
Some employers are going with an option of issuing wages to employees on payroll cards (like prepaid credit cards) instead of issuing checks or making direct deposits into their bank accounts. Here in Indiana, the state issues unemployment benefits that way. Although it might sound like an easy and desirable option, not everyone is thrilled with it.
In fact, the Consumer Financial Protection Bureau (CFPB) is reporting that employers are reportedly pushing the cards on their workers and that there are some issues.
The primary issue is that there are fees associated with using the cards. Banks are charging usage fees and there are some instances where card holders are charged when simply checking the balance on the card. The CFPB says that those fees carve away at the funds workers and their families have to live.
According to Sen. Richard Blumenthal (D-Conn), the CFPB has made clear that employers offering the payroll cards must also allow employees to opt out and clearly disclose fees associated with the cards in order for employees to make an informed choice.
Processing payroll in any business can be time-consuming and complex. Payroll services, like those provided by The Payroll Department take away not only the time you spend on payroll, but the worry about keeping up with changing laws and trends. Choose to remove the headache. Government and technology keeps the wheels of change moving along, that is certain.
Small business does its part in creating a workplace and filling jobs. Outsourcing critical and technical processes like payroll makes sense. Using a payroll provider means you get the experience and expertise of professionals at a rate that might be less than the value of your time and potential fines for errors or missed deadlines on payroll taxes or reports.
When you need to make decisions about payroll, whether it is how to issue pay to your employees, or how to comply with payroll taxes and reporting restrictions, call the experts. They can provide the information entrepreneurs and small business owners need.
-Melissa of The Payroll Department Blog Team