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My employer is planning to require all employees to be paid by direct deposit. A number of our employees are unbanked, and opening an account is not practical. I understand the employer's concern to be the cost of issuing checks. What other (legal in the US, Tennessee) options might my employer have besides issuing checks and direct deposit, and what are their advantages and disadvantages?

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    If you are asking about some law - why don't you tell us in what jurisdiction? Many countries have many different things other countries don't have. – littleadv Apr 22 '15 at 16:11
  • True! Updating to reflect. – Stephen Collings Apr 22 '15 at 16:15
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According to the TN DOL FAQ, the employer can choose how to pay wages.

Other options include checks and cash.

However, it is the employer's choice, not the employees, on how to pay the wages. In case of direct deposit, the employee can choose the bank at which to receive the money.

Why would opening an account be unpractical is beyond me. You can also use services like AMEX Serve, NetSpend, or even Walmart's MoneyCard.

  • Some of the unbanked population are not able to open bank accounts due to negative Chexsystems reports. – Jesse Jul 14 '15 at 19:26
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I'm a bit loathe to offer this response, but some pre-paid credit card vendors offer "direct deposit" to the card. Not surprisingly, Wal-Mart is one of them -- the very first "how to reload" option is direct deposit from an employer:

https://www.walmartmoneycard.com/walmart/account/learn-how

I think this sort of service encourages bad money habits. People shouldn't have to pay fees to get their own money.

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