In response to the tens of millions of “unbanked” workers in the U.S., many employers have begun issuing payroll cards to their employees. These items work just like debit cards from banks but allow workers to dip directly into their company payrolls, as opposed to the more resource-intensive process of cutting checks.
Most payroll debit cards allow all employees within an organization to be enrolled in direct deposit, regardless of existing banking relationships. There are a number of benefits for both employers and workers. For example, companies are able to reduce the cost of issuing paper paychecks. Such devices are also more secure, as they minimize the risk of check fraud, offering an additional employee benefit as a result.
Workers benefit most directly from their convenience and security, as their wages are immediately available on payday. Furthermore, individuals without checking accounts or established bank relations do not need to establish one, and families can even receive multiple payroll cards for use.
Businesses of all sizes are looking for ways to improve payroll efficiency and employee satisfaction while also maintaining adequate security standards. Complete electronic payroll systems allow employers to meet these goals.
With the growing popularity of payroll cards, especially amid rising discontent with banks, a number of HR management and payroll associations – including the Association for Financial Professionals, Electronic Payroll Coalition, Electronic Payments Association and the American Payroll Association – have collaborated to develop a series of core principles for payroll debit cards. Employers and payroll managers considering electronic payroll systems should consider some of these standards:
- Employee should have access to full wages at least once each pay period without cost.
- Terms and conditions should be disclosed in a clear manner before the employee is enrolled in the payroll card program.
- Employees should be allowed to check account balances via telephone or electronic platforms, such as online networks, and these services should be offered without cost to the employee.
- The funds in a payroll card account shall not expire.
- If the card has an expiration date, the employee should be provided with a free replacement card prior to that deadline.
Have you considered offering your employees access to a payroll card? Learn more by visting the Sage Payroll Paycard website.