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  1. #1

    Question Employer Won't Let Employees Opt Out of Direct Depost

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


    My employer does not allow employees to opt out of direct deposit once they begin direct deposit, is this legal? I was told once you set up for direct deposit they will not issue a live check again, if I no longer want my payroll check to be deposited into that bank account on file I must re enter new banking info or set up a pre paid debit card, no exceptions. NOT HAPPY

  2. #2
    Join Date
    Sep 2010
    Location
    Oklahoma
    Posts
    695

    Default Re: Direct Depost

    That is up to the employer. I couldn't find anything in the CA laws that states an employer must pay you in any particular manner. You voluntarily opted for the direct deposit and knew (or should have known) that it was unrevokable at the time you agreed.

    However, the company is required by law to pay you. If you inform them that you are closing the account and will not be relinquishing any new bank info you can expect to get paid your remaining wages upon your termination. Upon termination or resignation, CA law is clear that the employer must give payment in a hard form unless the employe waives the right and elects for direct deposit.

  3. #3
    Join Date
    Jun 2011
    Location
    Live in NV; worked in CA
    Posts
    19

    Default Re: Direct Depost

    antrc170 - I'm not seeing where the voluntary selection of direct deposit is irrevocable on the part of the employee in California. Are you referring to an employer having such a policy or something in California law? If the latter, can you refer me to the CLC section for this? What would an employee do if his/her bank were closed by FDIC? In some instances, another bank takes over and direct deposits continue with the bank who took over. But that isn't always the case — sometimes there simply isn't another (successor) bank, in which case the employee has no alternative but to opt out of direct deposit, at least until such time as the employee sets up another bank account.

    The California companies I have managed allowed employees to opt out of a previously authorized direct deposit.

  4. #4

    Default Re: Direct Depost

    We were never made clear once we set up the direct deposit it was irrevocable. It comes down to I no longer want to have my payroll check loaded on a debit card or into a bank account, I just want to receive a live check that I can cash when and where I want. They do not have a option to remove the direct deposit without putting in new banking information.
    If for some reason the bank returned your payroll deposit to the company due to a closed account then they would issue a live check, or possible request you load it on a pre paid debit card

  5. #5
    Join Date
    Dec 2009
    Location
    Lake Chapala
    Posts
    3,043

    Default Re: Direct Depost

    Mandatory direct deposit is legal in many states. If CA is one of these states (and one of my esteemed colleagues here will be able to tell you this), then your employer is not doing anything illegal.

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