With more men and women joining the workforce without checking accounts, many employers in the Johnson City, Tennessee area have found the need to start paying their employees with debit cards. However, this method of payment poses a couple of issues for employers.
The Problems
First, you cannot require your employees to have a checking account or to receive their paycheck in the form of a debit card. Second, you have to disclose the fees associated with the account, the account history, and their rights.
The most common issue of these two is the fees associated with using debit cards. If fees on their card cause their hourly wage to drop below minimum wage, you are in violation of the Fair Labor Standards Act (FSLA). This can also come into play when you withhold funds from their paycheck for failure to return company equipment, their uniform, their cell phone, etc. The FSLA requires that all employees be paid at least minimum wage, so be careful. Make sure you do not drop the total amount of their pay check divided by hours worked below the current minimum wage.
Contact Us
If you have any questions about this or any of your business insurance needs, contact our Tri-Cities office today at (423) 292-4142 or email us at help@veritasrm.com. We will be glad to help you make sure you have the coverage you need.
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