Direct Deposit of Payroll

Eliminating payroll checks is a simple way to eliminate check fraud. Cities, counties, towns, school districts and other political subdivisions or agencies of local government may require employees to use direct deposit for payroll checks (see   Minn. Stat. § 471.426). Using direct deposit for payroll eliminates the possibility that payroll checks may be altered, lost or stolen.

Using direct deposit has several other advantages. It minimizes the entity’s cost of distributing checks, replacing lost checks, and buying check stock. Surveys also show that employees value direct deposit. It saves the time and expense involved with cashing or depositing checks and provides employees immediate access to their funds.

Date this Avoiding Pitfall was most recently published: 02/16/2018