Hawaii lags the nation in direct deposit adoption. Why? Some employees don’t have a bank account or just greatly prefer to have money in hand. At the same time, many employers simply don’t offer the option, a decision that ultimately creates more work for them.
To get your business ready for direct deposit, let’s take a fast look at employer considerations, business and employee benefits, and how to get your team on board.
What are my wage payment rights as a Hawaii employer?
Hawaii wage payment law grants employers the option to pay their employees in cash, check, through direct deposit, pay cards, or debit cards without deductions or fees.
Electronic payment methods need to be voluntarily authorized by an employee. In other words, you cannot require your staff to get paid through direct deposit, pay or debit cards.
How do I set up direct deposit?
Getting direct deposit started is quick and easy. Talk to a bank that provides ACH (Automated Clearing House) payments. Chances are your current bank offers the service.
Fees for set up, monthly service, and per transaction vary, depending on your bank and company size.
What are the benefits of direct deposit?
- Save money—while direct deposit isn’t a free service for employers, it does save money in the form of reduced bookkeeping and payroll processing time, as well as paper and supplies.
- Save time— As mentioned above, your business will spend less time processing payroll, cutting checks, and doing mail runs. Since transaction reports are easily accessible online, you’ll also save on bookkeeping time. Your employees will save themselves a trip to the bank every pay day and receive access to their funds almost immediately.
- Ensure safety—no more lost, misplaced, or stolen checks.
- Be more reliable—your employees get paid on time every time.
- Offer flexibility—your employees will still get paid even when out of town.
- Take financial control—your employees can allocate their pay into different accounts giving them the opportunity to directly set aside money into their savings account.
How do I get my employees on board with direct deposit?
To get your team on board with direct deposit, focus your message on what’s in it for them. Going online for basic activities is the new normal, now more than ever. People who rely on paper and in-person processes—both employers and employees—are at a disadvantage.
If your employees don’t have bank accounts, consider partnering with a local financial institution to get them set up. Clients of simplicityHR and their employees receive membership privileges at multiple credit unions.
While it seems simple in theory, getting employees paid on time involves a lot of moving pieces. Here at simplicityHR, we make payday and business simple, so that you can focus on what you do best.
This material is provided for informational purposes only. It is not intended to constitute legal advice, and readers should consult with their advisor or counsel before taking any actions based on the information contained within this material.