Tuesday, November 3, 2009
Wal-Mart Stores Inc., the nation's largest private employer, is eliminating paper payroll checks in the U.S., transferring workers' earnings to a debit card if they decline direct deposit to a bank.
Wal-Mart is the biggest company yet to make the move that it said will save paper and money. It estimates the move will save 257,572 pounds of paper a year. It declined to specify the savings but said the shift will reduce its payroll costs . . . .
Some Wal-Mart workers last month received earnings electronically in the form of credit to a MasterCard Inc. debit card. The program will roll out nationally this month, though many of Wal-Mart's 1.4 million U.S. workers will continue to receive paper checks for months while it is fully implemented. About half of its U.S. workers now receive paper checks.
Though the debit cards save companies money by reducing payroll costs, consumer advocates have criticized some card programs, noting that workers are often charged fees to access their money or even check balances.
I understand the consumer adovocates point and I appreciate the environmental angle, but as an employment law professor I wonder (out loud) whether this arrangement could violate a state's wage payment and collection law?
At least in Michigan, under the Michigan Wages and Fringe Benefits Act, the answer appears to be "no." There, Mich. Comp. Laws Ann. § 408.476 (West Supp. 2006) allows Michigan employers to mandate use of a payroll card by employees. Most of these laws require that employees be paid in cash or check, and not in some other form of payment.
Do any readers have insights from other states?
Hat Tip: Hammad Haider-sha