A new Kansas law could lead to the elimination of paychecks—paper ones, anyway. The state’s employers can now require employees to receive their pay either by direct deposit or pay card.
And it could save businesses a lot of money.
While most states still require that employees have the option to receive paper paychecks, more than 70% of Americans participate in direct deposit.
What about workers who don’t have bank accounts?
According to a study by the Federal Reserve Bank of Philadelphia, pay cards are one of the least expensive ways to receive wages. They act like debit cards for wages and can provide the cost savings and convenience of electronic payments even for employees who don’t have bank accounts.
The most expensive way to pay wages? Paper checks.
Source: American Payroll Association, www.americanpayroll.org.