Q. I was just hired and my employer handed me paperwork to go on direct deposit. I prefer to get a paper paycheck. Since it´s my money, it seems like it should be my choice.
A. According to ORS 652.110 employers may require employees go on direct deposit without employee consent. Previously, employers and employees had to agree to authorize direct deposit but since 2014, employers can have direct deposit as the default. Employees must now proactively opt out of direct deposit. Employees can opt out of direct deposit verbally or in writing. Employees unable or unwilling to go on direct deposit will likely notify their employer immediately. If they make this request, employers can also point them to electronic options such as debit cards.
The Agency’s enforcement policy is not to take complaints from newly-hired employees on the issue of mandatory direct deposit, when the employer had given prior notice to the prospective employees that direct deposit would be required as a condition of employment. However, employers should consult with an employment attorney before proceeding with such a policy, because the courts may conclude, for public policy reasons, that making direct deposit mandatory is improper even at the pre-employment stage. Some prospective employees may be credit challenged and unable to qualify for an institution to have their wages directly deposited.
Employers who do use the direct deposit method of paying wages should be aware that doing so doesn´t change the strict deadlines for paying an employee´s final wages upon termination. However, the law says that even the final paycheck may be paid by direct deposit, "provided the employee and the employer have agreed to such deposit." ORS 652.140 (4).
Q. Is it legal for an employer to pay wages by issuing employees a "debit card" that can be "swiped" at local banks or institutions for cash or merchandise?
A. Payment of wages by debit card is legal and permitted by ORS 652.110 (5) if the employer and employee agree to this arrangement.
Also, the instrument of payment - in this case, the debit card - must be negotiable and "payable without discount in cash on demand at some bank or other established place of business" in the county where it is issued. The Bureau´s interpretation of this statutory language is that the employee must be able to receive the full amount of his or her wages by swiping the card and may not be charged any fee for doing so.
Nothing on this website is intended as legal advice. Any responses to specific questions are based on the facts as we understand them, and not intended to apply to any other situations. This communication is not an agency order. If you need legal advice, please consult an attorney. We attempt to update the information on this website as soon as practicable following changes or developments in the laws and rules affecting Oregon employers, but we make no warranties or representations, express or implied, about whether the information provided is current. We urge you to check the applicable statutes and administrative rules yourself and to consult with legal counsel prior to taking action that may invoke employee rights or employer responsibilities or omitting to act when required by law to act.
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Portland, OR 97232
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