Employer is Effectively Forcing Direct Deposit

[bluecollaraddict]

My question involves employment and labor law for the state of: Michigan.

Michigan law states: "...an employer or agent of an employer shall not deposit an employee's wages in a bank, credit union, or savings and loan association without the full, free, and written consent of the employee, obtained without intimidation, coercion, or fear of discharge or reprisal for refusal to permit the deposit."

My employer has said that beginning next week, they will no longer hand out checks. Anyone without direct deposit will have to pick up their checks at the payroll office. This office is a quarter mile down the road in a different building. Furthermore, they said that 1st shift may pick up their checks Thursday between 9-11am, which is during working hours, meaning we can't pick them up at that time. Any checks that are not picked up will be mailed on Friday. Which means they will probably arrive Mon or Tues, 4-5 days after "payday." Is it me, or does this seem borderline illegal?

[LawResearcherMissy]

The law doesn't require that paychecks be available at the place most convenient for the employee, nor does it prohibit the mailing of checks. It only says that employers may not force direct deposit.

What's your objection to direct deposit?

[PattyPA]

Agree. Carrot or stick approach. Perfectly legal.

[bluecollaraddict]

I don't have a problem with direct deposit. I do have a problem with my employer saying "Get direct deposit or we will pay you 4-5 days later than everyone else."

[LawResearcherMissy]

Then get direct deposit. It's really nice to wake up on payday to find that your money is already there, no fuss or muss with picking up a check and dragging over to the bank.

The law does not require that you have the paper check in hand on payday, only that it is available to you. They're within their rights to make pickup available only during certain hours, and they're within their rights to mail the checks out after a certain period of time has elapsed. (And in fact, they are REQUIRED to do so after 7 or 10 days of no pickup, depending on the state.)

They're not "paying you later" - that would mean there's no check there on payday.

[bluecollaraddict]

I have direct deposit. I've had it for years. But that doesn't mean I ignore things that are potentially illegal just because they don't apply to me. That is a very selfish attitude.
Anyway, the carrot and stick approach is a form of coercion, no? And the law says you can not use coercion. And yes, they make checks available--for 2 hours, during working hours. ANd my boss told us we will not be allowed to pick them up during the time they are available. So really the only options are direct deposit, or mail. So, in effect, they are saying people with direct deposit will be paid on time, people without it will be paid almost a week late. How is that not coercion?

[PattyPA]

It's not "coercion". It's a choice. And a legal one. Companies have done this for decades and I have NEVER heard of a problem with it.

Coercion would be "sign up for direct deposit or we'll chop your pinkie off".

[firebob]

I have worked at a place that did something similar years ago. Every time it was questioned they would talk about the amount of time it took to pass out 300 pay checks every 2 weeks. Someone would always clamed not to get there pay check so who would pay the cancel check fee and deal with that mess. Every one that had direct deposit could log into the computer and see there “check stub”.
The company clamed they could save $3,000 a year and gave us an extra company pick nick every year.

[PattyPA]

As one of my respected colleagues (who used to manage disbursements, both payroll and Accounts Payable for several large corporations) says:

Paper checks are evil.

[LawResearcherMissy]

I agree with your colleague!

I have one client who insists on paying me with a paper check, instead of via PayPal or direct transfer, and it's maddening to have to wait for the mail, then drag up to the bank.

Here in Ohio, employers are allowed to force Direct Deposit. My husband's company did just that, and even went to online only paystubs through ADP. It saves the company nearly $3000 a year in courier fees alone for just his store. (Multiply that by 15 stores in our state!) This doesn't even include what they've saved in paper costs and man hours.