Having direct deposit is an efficient and time-saving method for many employees to get paid. An employer will usually offer this option to an employee at no cost, with no deductions being taken from their wages to deposit the funds. However, there are a few things you should know about this option.
First, your employer can’t charge you a fee for direct deposit. Any charge by an employer for the direct deposit of a paycheck is considered an illegal deduction of wages in under the Massachusetts Wage Act. Nevertheless, there have been some instances where employers have taken deductions from an employee’s paycheck as an administrative fee for providing direct deposit, and that is unlawful (The Boston Globe, Charge for direct deposit of check-legal?, June 29, 2009).
Second, your employer can require you to be paid via direct deposit, however they cannot specify what bank your deposit goes to. The Office of the Commissioner of Banks issued a 1997 opinion which found that the law does not preclude an employer from mandating that employees have a direct deposit account to receive their wages. However, an employer cannot specify which financial institution will receive the direct deposit.
The Attorney General’s Fair Labor Division is responsible for enforcing the minimum wage and overtime laws, and the payment of wages laws in the Commonwealth. Workers who feel that these laws have been violated in their workplace are urged to call the AGO's Fair Labor Hotline. More information about the wage and hour laws is available in the Workplace Rights section of the AGO website, and in multiple languages at MassWorkRights.com.
Comments