page header
Home Contact Us Calendar of Events DOL Publications Statistics About NCDOL Informational Links Site Map Search our Site

   

DIRECT DEPOSIT ENFORCEMENT POSITION

The payment of wages by direct deposit is a recognized form of payment as stated in 13 NCAC 12.0309, Form of Payment of Wages:


G.S. 95-25.6 and G.S. 95- 25.7 do not require a specific form of payment. Therefore, the employer may select any legal form of payment, so long as payment is made in full on the designated payday, subject to authorized deductions and legal withholdings. Acceptable forms of payment include cash, money order, negotiable checks, and direct deposit into an institution whose deposits are insured by the United States government or an institution selected by the employee.

 

It is entirely up to the employer to pay or not to pay some or all of its employees by direct deposit. An employer can make the payment of wages by direct deposit as a condition of employment without violating the Wage and Hour Act. If direct deposit is the only option offered the employee, the employees must be able to choose their own financial institution. If direct deposit is used in conjunction with the use of a payroll card account, an employer can require the payroll card account to be with a particular financial institution as long as deposits in that institution are insured by the U.S. government, and as long as regular direct deposit is offered to any financial institution of the employee's choice.

 

It is also the enforcement position of the N.C. Department of Labor that if the payment of wages by direct deposit by an employer is mandatory, then its employees must not incur additional costs as a result of participation—such as bank fees—if those costs result in an employee being paid less than the N.C. minimum wage of $7.25 an hour. Conversely, we take the position that if direct deposit is completely optional and an employee elects to be paid by direct deposit, then the costs to this employee can bring the employee's pay below the minimum wage. If your business/employer comes under the federal Fair Labor Standards Act (FLSA), you will need to contact the U.S. Department of Labor Wage and Hour Division concerning the federal minimum wage and their position. Contact the federal wage and hour division in Charlotte at (704) 749-3360, in Raleigh at (919) 790-2741, or visit the Web site at http:// www.dol.gov.

 

Please keep in mind that an employer cannot discriminate against its employees for reasons based on age, race, sex, religion, national origin, color, disability or pregnancy. For discrimination questions based on these protected categories, contact the Equal Employment Opportunity Commission (EEOC) at 1-800-669-4000 or visit the Web site at http://www.eeoc.gov. If you feel you are being treated unfairly for reasons other than the protected categories, you should consult with an attorney. You can contact the N.C. Lawyer Referral Service at 1-800-662-7660 or visit the Web site at http://www.abnet.org/referral

 

 

N.C. Department of Labor

Wage and Hour Bureau

1101 Mail Service Center

Raleigh, NC 27699-1101

(919) 807-2796 or 1-800 NC LABOR

Web site:  http://www.nclabor.com

 

 

 

 

page ender

Home | Contact Us | Calendar | Publications | Statistics | About Us | Links | What's New | Site Map | Search
Privacy Policy | Disclaimer | Mission Statement

1101 Mail Service Center • Raleigh, NC 27699-1101 •  919-807-2796 or 800-NCLABOR