• No fee to the cardholder for swiping the card as credit at point-of-sale transactions
• No cost Bank Teller withdrawals
• Cardholder can withdrawal cash for free at in-network ATMs.
• Paycards are FDIC insured with fraud protection
Best for a few under-banked employees
Yes. Funds on a bank-issued payroll card are insured by the FDIC. If funds are not deposited at an FDIC-insured bank, they are not insured. In today's marketplace, all payroll cards are held in insured banks. Some may offer FDIC pass-through insurance, where funds are held in a pooled account.
You can get a direct deposit form online. We have a free downloadable direct deposit form. A direct deposit form should state the bank routing number, the individual account number, and the name of the recipient's bank along with its address. The form should include a place to record the worker's consent to receive all or a portion of pay by direct deposit.
Most payroll card programs are free for employers, but most card programs do charge fees to workers. In most states, wage and hour laws include rules requiring cards to give workers the right to draw cash at an ATM for free on at least one occasion per pay period. Payroll card companies establish fee schedules that conform to state law.
It depends. The Federal Labor Standards Act ("FLSA") gives this right to employers. In fact, they can even do so without giving notice to the worker. However, some states impose stricter standards of their own. In California, where lawmakers have created some of the most worker-friendly rules, employers have to notify in advance and then receive written consent from the employer before pulling back any wages. In Washington state, employers only have 90 days to detect the error; after that, they cannot recoup the excess payment. We recommend that you contact a lawyer to verify the specific laws that apply in your state.
The most common fee is a charge to use an out-of-network ATM. In most states, employees have to receive one free withdrawal per pay period. Usually, that occurs through a bank teller, as it is impossible to withdraw 100 percent of wages at an ATM (they don't disburse pennies). Some cards charge as much as $7 per out-of-network withdrawal. Many cards charge between 50 cents and one dollar when a transaction is denied at the point-of-sale. A small group of card programs will charge overdraft fees of as much as $27. Some cards charge to use online bill pay, but most cards do not offer the service. Generally speaking, it should be possible for a worker to avoid all fees with the proper use of a card. Almost always, using a payroll card will cost less than going to a check casher.
Yes. Federal law provides for a variety of consumer protections, most under Regulation E (the Electronic Funds Transfer Act). Highlights include: employees must be able to receive an account statement or have access to their balance over the phone. A cardholder must be able to access 60 days of transaction history online and on paper if requested in writing. Employees must receive all of the terms and conditions of the account. The payroll card's bank must respond to account errors in a timely manner. Likewise, cardholders have rights to recover funds if their account is utilized in an unauthorized manner. Most states apply additional rules.
From your perspective, you want a company that provides a robust set of services to your payroll department. The ability to facilitate direct deposits from inside a client portal is paramount; you will want the flexibility to do more than just process standard payroll - you may want to issue reimbursements, make corrections to payroll, and set up off-cycle disbursements. You will want to make sure that there is round-the-clock customer service, not just for your company, but also for your workers. If your workers cannot reach customer service, they will probably call you instead. Avoid that possibility.
Secondly, you should think about your employee's interests. Does the company offer access to a surcharge-free ATM network? Are there lots of gotcha fees? If some of your workers do not speak English, will the company have the means to address their needs? Is there an app? Will the account have the ability to access photo deposit of checks, in the event that your worker receives a paper check from someone else?
Yes. However, your payroll card company may offer an electronic paystub as a standard element of its service. Ask potential card companies if they do so. In some states, the employer must gain the consent of a worker to issue pay stubs electronically. Federal law requires employee consent to issue electronic W-2s. An employee may request a paper pay stub, so be prepared for that possibility.
Regardless of how pay is distributed, an employer is still obligated to honor outstanding bank levies placed by a creditor on a employee's person. Employers still must facilitate wage garnishments as well as debts owed to government agencies for things such as outstanding child support or back taxes (i.e. the IRS). These rules apply to wages regardless of payment mode; it is the same for wage payments made by direct deposit to a traditional checking account, a payroll card, or via a paper check.
They earn money when workers use their cards. Each payment made through VISA or MC earns what is known as "interchange." As of spring 2019, a VISA payment returns 15 cents plus 1.65 percent of the sum of the transaction. If a worker makes 23 swipes (national average) for a total of $1,000 in one month, then the total interchange equals $19.95. The marginal cost of offering a card generally ranges near $5 per month, so payroll card companies can make a profit without charging any fees to workers or employers.
First, your employee should report this information to the payroll card company. The payroll card will immediately be deactivated. A new card will be sent to the employee's home address. The funds are safe, as no one can use the card (physically or online). The existing balance will be transferred to the new card. When it arrives, the employee should activate the card before using it. In the meantime, if your employee must access the funds, you can provide him or her with one of your instant issue cards. Report that to the payroll card company and those funds will be made available through that card up until the new card is activated.
Methods include asking for cashback (PIN) at the point-of-sale, using an ATM, making a withdrawal at the teller window of a bank branch, and a convenience check. Not all payroll cards offer all of these options. All payroll cards must allow a worker one free opportunity to withdraw up to 100 percent of his or her pay during each pay period. The FinTwist Card, offered by WiseWage on this page, is unusual in that it gives workers unlimited ATM withdrawals from inside the surcharge-free MoneyPass ATM network.
No, you cannot view the activity on their accounts. The issuing bank must protect a cardholder's non-public personal information under conditions established by the Gramm-Leach-Bliley Act. Many employees do not understand that their information is firewalled and may perceive a payroll card as suboptimal for that reason. You should communicate this to your workers that in fact, their activity is truly private. Some employers express a desire to help their employees save, and while that reflects the best of intentions, the best thing such a person could do would be to encourage the worker to get a savings account and then establish a split direct deposit.
The employee controls the funds on a payroll card. As soon as funds transfer from the employer's account, the employee has sole claim on the monies. The employee has all of the rights for fraud protection, the reversal of unauthorized charges, and other benefits owed to the account by law or the card network (VISA, MC) rules.
No. Due to this aspect of the payroll card product, employers can achieve their goals of 100 percent payment of wages by direct deposit. Payroll card companies do not check credit. To the extent that they review applicants, they check the characteristics of the employer. They ask employers to provide a tax identification number, a physical address, and evidence of business registration. Generally, payroll card companies have minimum standards for the number of employees who need a paycard. If your business only has a handful of unbanked workers, you may be turned down by a paycard issuer.
From the viewpoint of the employee, it works the same. A payroll card can receive funds electronically, provides a means to withdraw cash, and uses a card network (VISA, MC) to let the account holder make purchases. Beyond those criteria, payroll cards vary in their functionality. Some allow deposits by other modes (load cash, photo check deposit), some have a savings account, and some have overdraft options. From a regulatory perspective, payroll cards are different than prepaid debit cards. Unlike prepaid debit cards, payroll cards must conform to state wage and labor laws. States have different standards for these accounts. Both prepaid and payroll cards are covered by Regulation E.
The payroll card company will include the list of account numbers for each card.
The routing number refers to the bank. It is the same for all of the cards.
It's easy! You break off a card from the set of cards sent to you by the company.
Immediately, you call to activate it.
Once you confirm the routing and account number, you can pay them with direct deposit.
Going from opening the account to setting up payroll takes only a few minutes.
Yes. The payroll card companies featured on Wisewage can only provide cards that follow the law.
Fees and services are adjusted to fit within the rules of each state.
Yes. They can use their smart phone to deposit their check into their payroll card account for free without having to go to a check casher anymore.
No, your payroll card company will not charge any additional fees.
You should store the set of unused cards in a secure place.
It is important that unused cards remain in your hands only.
In most instances, the card will be able to receive direct deposits from other sources. In every instance, the employee will still be able to spend down the remaing balance.