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Some of these states require specific written permission, which must be retained by the employer.Business owners are advised to contact their state department of labor, an attorney or an accountant to make sure they are complying with state rules for employees who elect to receive direct deposit wage payments in these states.In California, most employers must pay employees their regular wages, with some exceptions, at least twice during each calendar month on the days designated in advance as regular paydays.
Because employee payroll laws vary from state to state, employers with operations in multiple states must be sure to comply with the laws of the particular state in which it is doing business.
Some states allow employers to require employees to accept direct deposit of wages and bonuses.
Others allow employees to choose between direct deposit and traditional paychecks.
A small business cannot legally try to save money on bank direct deposit fees by having its employees open direct deposit accounts at the bank where the business holds its own accounts.
The FDIC has clarified that this does not prevent an employer from requiring direct deposit as long as the employee chooses the receiving bank: "An employer may require direct deposit of salary by electronic means if employees are allowed to choose the institution that will receive the direct deposit.