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Payment of Wages to Employees of Bank (Reg E)

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Question: 
Regarding payment of wages to employees of a bank, the bank has decided (after years of allowing direct deposit to any account at any bank) to either allow direct deposit to an account at their bank or payment by check, meaning anyone with direct deposit of their wages to another institution must decide on opening an account at the bank where we work or get paid by check (not desirable choices). I have a few questions regarding this change. Although it is in compliance with Reg E, since we work in Florida, I was wondering if Florida Statute from chapter 532 applies, specifically 532.04 PAYMENT BY DIRECT DEPOSIT OF FUNDS (1) reads as follows "None of the provisions of this chapter shall be deemed or construed to prohibit the payor of wages or salary from causing the amount of such wages or salary to be deposited directly to the account of the payee in a financial institution by electronic or other medium if such direct deposit has been authorized in writing by the payee and if the payee has designated in writing the financial institution of her or his choice in which such deposit is to be made." I am not a lawyer but it seems to me that the statute is stating that if an employee gets paid by direct deposit, the financial institution for that direct deposit is of the employee's choosing. I believe the bank policy for payment of its employees violates the Florida statute and I would appreciate it if someone could let me know their opinion or interpretation. Also, one more question, if the employee had to complete a direct deposit authorization form, can the bank just cancel those instructions and change to a check or would the bank need each employee to sign another form authorizing the change or cancellation of a direct deposit order already on file? Obviously most employees are not happy with the change but are somewhat nervous about speaking up. Dissent with this current policy is not popular with upper management. I would like to keep this inquiry discrete for obvious reasons, feel free to share, in a general way, this issue but please do not mention my name.
Answer: 

The excerpt from Florida law doesn't provide the full context of the Florida statute, but it appears to result in the same restrictions imposed by the Federal Electronic Fund Transfer Act and Regulation E: If an employer mandates direct deposit as the only way in which it will pay employees, the employer cannot require that those deposits go to a particular institution.

An employer that offers employees the option of receiving their salary or wages in check form or by direct deposit to an account in an employer-selected financial institution is not mandating that employees use direct deposit, and would not appear to be in violation of either the Federal or the Florida statute.

First published on 01/22/2017

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