PEOs Help Employers Understand Payroll Card Laws

Recent lawsuits and complaints from employees have sparked investigations into the use of payroll card programs and the fees they can carry. Many employers issue payroll cards to avoid the expense of paper checks. Payroll cards offer an instant, paperless payment method to employees who do not have access to a bank account and are unable to enroll in direct deposit. However, as with direct deposit programs, the use of a payroll card program comes with regulations that vary greatly by state.

The majority of states require both direct deposit and payroll card programs to be completely voluntary and in the case of payroll cards, many states require that employees get free access to their full pay and all fees must be disclosed prior to enrollment. It is important for employers to understand the compliance issues of payroll processing when finding alternatives to the paper check method.

In addition to the rules an employer must follow regarding paperless payment, an additional set of conditions exists regarding check stubs. Most states allow electronic pay stubs in lieu of paper ones as long as the electronic pay stub is accessible on a secure site and is printable at no charge. Again, these conditions vary by state and employers are encouraged to contact payroll professionals in their state to verify laws.

By partnering with a Professional Employer Organization (PEO), not only do you have access to a variety of payroll options that includes money-saving payroll methods like direct deposit and payroll cards, you also have access to human resource compliance experts that can verify your payroll methods meet the standards of state regulations. PEOs are especially convenient for employers who operate in multiple states. A PEO will ensure payroll is filed properly in each state and offer guidance to employees during the on-boarding process to ensure employees are enrolled and informed in accordance with state laws.

If you would like more information on the ways a PEO helps with payroll processing, pleasecontact SOI today.

About SOI

SOI is a leading professional employer organization (PEO) for small and medium-sized businesses (SMBs) serving as a trusted partner in integrated human resource (HR) compliance, risk management, employee benefits, employment practices liability insurance (EPLI), and payroll processing. SOI is based in Charlotte, NC and supports tens of thousands of worksite employees throughout the U.S. For more information, visit SOI.com