Every pay day, your employees must come by the office or seek out a supervisor to receive their paycheck. Sometimes, you may not be available when they stop by or maybe the delivering of your company’s payroll package is running late causing undue frustration for your employees.
The old saying that “time is money” is also a factor. Not only does the employee need to pick up their check from work, but they must then make a trip to the bank or check cashing facility to cash or deposit their check. Of course, they might even take time away from their job to do so, adversely impacting your company’s productivity and profitability. The fact that your employees must find time to go cash their checks creates numerous opportunities to misplace their paycheck or even lose it. It’s totally understandable that delays in getting paid can create anxiety and even anger for the impacted employees.
According to the National Federation of Independent Businesses, 60% of employees already receive their paychecks through direct deposit, and increasingly more employees are expecting to receive their wages electronically. The advantages associated with paying your employees electronically include: (1) reduced risk of check fraud and lost or stolen checks, (2) greater control over payroll and payroll expenses, (3) timely payment of wages, (4) employees don’t have to be in the office to get paid, (5) employees have access to funds earlier than with paper checks, (6) no time wasted at the bank or ATM, therefore less employee time away from work, and (7) reduced risk of payroll delivery delays due to weather, interim payrolls, or payroll error corrections.
Frankly, brick and mortar banks are rapidly fading into the past as most banking is now done online today. As a result, there are very few reasons why anyone goes to the bank. As for check cashing establishments, the fees charged your employees to cash their check are usually exorbitant. With paper paychecks, your employees usually must make a special trip to the bank or check cashing establishment to cash or deposit their paycheck. However, with direct deposits or pay cards, there’s no need for employees to go to the bank because their paycheck is deposited directly into their account. Additionally, if a payday occurs on a holiday, employers can process payroll earlier and have their payday fall on a different day. If employees are on vacation or if they’re taking a sick day, they’ll still be able to get paid electronically.
The electronic payment of wages automatically places an employee’s paycheck into their checking, savings, or pay card directly from the employer’s account. Paying your employees electronically is a secure option for employers and is convenient for employees. The ACH, or Automatic Clearing House, is the electronic network for making these types of financial transactions.
By paying your employees electronically, they can deposit their wages into multiple accounts such as checking, savings, pay cards, credit unions, etc. This allows employees to have a portion of their paycheck go directly into a savings or retirement account while the rest of their paycheck goes into their checking account. This capability provides a flexibility and convenience that your employees will enjoy and are increasingly expecting.
To find out more about how you can start paying your employees electronically, contact your LLRG PEO Representative or Payroll Specialist. You’ll discover that it is a fast and easy process for you and your employees.