Employees come to work every day for many reasons, but the one day that all employees look forward to is payday. How employees receive their wages on payday can impact both the employer and the employee.
Although there are other options, the most common methods of payment are either by check or direct deposit.
By encouraging employees to sign up for direct deposit, employers eliminate the risk of lost/stolen checks, altered checks, and checks that are never cashed. Employers that have 100 percent of their employees signed up for direct deposit will increase efficiency throughout the workplace.
Employees that choose to receive a live check are at a disadvantage. Although they may receive their check on payday, they must take time out of their day to obtain their check, take it to the bank and cash or deposit it. Depending upon where the employee banks, there may be a waiting period before the funds are available for use.
On the other hand, direct deposit for employees:
• Allows them to receive their pay sooner. It automatically goes into an employee’s bank account, even if they are on vacation or away from the office
• It saves them from making a trip to the bank and allows easy, faster access through electronic transfer, making things like online banking easier
• Safeguards against forgery and theft which are possible with paper checks
• Allows employees to select more than one account in which to distribute their pay. An employee can put some money into savings and some into a checking account, for example.
Susanna Achatz, Payroll Manager