With the advent of direct deposit, dispersing and managing wages has become faster and easier for employers and employees alike. By reducing the amount of paper checks issued and switching to electronic solutions, companies have been able to help reduce costs and save on the time needed to track outstanding checks or manage escheatment rules. Plus, employees with bank accounts now see their pay in their accounts immediately.
However, there have still been barriers for companies looking to move toward an electronic payroll disbursement system. Specifically, employees without bank accounts are not able to benefit from direct deposit. Furthermore, tips for employees in the services industry are still distributed in cash when electronic payment options haven't been available. Having to distribute cash can make tasks such as managing tax deductions or wage garnishments more cumbersome. Certain employers have remained stuck in analog while payroll has rapidly been transitioning to digital.
For many, paycards are becoming a bridge into electronic payments. Paycards make it possible for companies to offer an electronic payment method to employees who do not have bank accounts, helping increase efficiencies and decrease costs. With many paycard programs, employees have the ability to pay bills with their cards, access ATMs and manage their money online, even without having a bank account.
Paycards can be a win-win proposition for employees and employers. Paycards can help make accessing wages simpler for employees while helping provide employers more security and savings in costs and time when making wage payments.
The information provided in this blog post is for informational purposes only and not for the purpose of providing accounting, legal, or tax advice. The information and services ADP provides should not be deemed a substitute for the advice of any such professional. Such information is by nature subject to revision and may not be the most current information available.
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