A recent article from the Associated Press details how free checking may be going by the wayside as financial institutions look for ways to cope with governmental limitations on fees. I will be watching this development to see how it impacts me personally. Businesses should be watching to see how it impacts payroll practices.
In some states, employers are allowed to require employees to participate in direct deposit. The applicable statutes may include caveats that the requirement can only be used where free checking is available to employees. Employers who avail themselves of direct deposit should check with their counsel to see if an alternative payroll method must be offered if free checking is no longer available.