It used to be that there was only one way to get paid by your employer: a direct payment made by either cash or check. Those were the days before the internet and instant electronic transactions. Now there are other payment options for employees, including direct deposit.
The payroll card is the newest iteration of wage payment and one that more and more employees are choosing. For example, consider companies like Darden and Walmart that are now offering payroll cards to lower wage earners who prefer them for the sake of convenience. Rather than receiving a paper check or payment through direct deposit into a bank account, employees who choose this option are issued a company debit card that allows them to withdraw cash from an ATM or pay for goods or services the same way they would with a Visa card.
A May 2016 report from Bloomberg says that roughly 50% of Darden's hourly workers have chosen the payroll card option. Some 48% have chosen direct deposit while the remaining 2% still receive paper checks. Darden maintains they have had very few complaints from employees choosing payroll cards despite the fact that there may be some fees attached to using the cards.
Reasons for Choosing Payroll Cards
Why would a worker choose payroll cards over one of the other options?
According to those companies that use them, it is all about convenience. Once an employee is issued a payroll card, there is very little else to worry about except checking pay statements to make sure the hours and wages are correct. The cards can be used to pay for just about anything without having to worry about carrying around cash, depositing checks, or checking to make sure direct deposits go through.
- Bank Account Limitations.
Another factor to consider is the reality that low-wage earners are more likely to go without a bank account. Not having a bank account makes life considerably more complicated in so many other ways. First, it is virtually impossible to cash a paper check without a bank account unless a person is willing to utilize a check cashing service that could take a significant portion of one's earnings as a convenience charge.
- Bill Payment Options.
The only way to pay bills without a bank account is with cash or money orders. A payroll card makes bill paying a lot easier because employees can use the cards anywhere credit cards are accepted. And these days, that is virtually everywhere.
Awareness is the Key
As convenient as payroll cards are, employees do need to be aware of how their companies and online payroll services providers utilize the cards. For example, there may be fees attached if a payroll card is used to withdraw cash from an ATM that is not considered part of the employer's network. Fees might also be charged for card replacement, transactions refused for insufficient funds, and other circumstances.
Employees should realize that it is their responsibility to make sure they know and understand all of the fees and charges associated with the payroll cards. It is no different from knowing and understanding the costs associated with a bank account or credit card.
Simplify Your Payroll Today
The BenefitMall Skylight PayOptions program is an innovative, secure and convenient payroll card solution that complements our payroll solutions. It allows you to provide a convenient alternative to traditional banks and checks for your employees. Get wages into the hands of your workers and spend more time concentrating on the success of your business, the needs of your employees and your professional goals when you use BenefitMall Skylight PayOptions.
To see if BenefitMall Skylight PayOptions program is a fit for you, contact us today!
Bloomberg – http://www.bna.com/darden-expanding-atm-n57982072345/