Encouraging reluctant employees to accept an electronic form of pay just got a big boost from the U.S. Government. The FDIC recently reported that the number of Americans with no checking or savings account fell to just 4.5% of households. The number of small businesses making the move to paperless payroll is increasing to keep up with the needs of the modern-day workforce.
Covid And Driving The Trend Of Paperless Payroll
One of the key drivers of this shift is the delivery of pandemic stimulus (known as Economic Impact Payments) to millions of households since March 2020. About 1 in 3 households making the switch away from paper delivery to a bank-based account reported to the FDIC that the government payment was a contributing factor. The speed and efficiency of delivery of these payments in an electronic format undoubtedly increased the willingness of recipients to seek a bank account.
Employers Making The Payroll Transition
The number of employers willing to produce paper payroll checks is shrinking, too. There is no rule against making electronic forms of payroll the only form of pay. A popular solution to those eschewing a traditional bank is the issuance of an electronic pay card. These work as a net pay deposit on pay day, and a declining balance as purchases are made with the card, which functions as a debit card only with no credit line. They can be re-loaded with the employee’s pay each week. Frequently they can be “branded” with VISA or Mastercard to improve recognition and acceptance at retailers.
Digitizing Payroll And Employee Transition
Communication is key for a smooth experience, and options are helpful in transitioning employees away from old fashioned paychecks. There should be a clear implementation timeline, and a point person(s) to assist in explaining the options being made available once paper paychecks will be discontinued. A written notice should be produced and distributed in the same communication method other company-wide notices are sent, and in multiple languages if needed. One of the reasons cited by Americans not using traditional institutions is a distrust of banks. Sensitivity of management personnel handling this situation is key to a smooth transition.
Explore Paperless Payroll And PEO Solutions With Sam Bond Benefit Group
Sam Bond Benefit Group, Inc. helps employers explore the options available to employers seeking to upgrade their systems for payroll and employee administration, especially those seeking to explore a full-service professional employer organization (PEO). The right PEO can help with a secure, efficient payroll system that can transfer certain payroll tax liabilities. Explore employee benefits within a PEO large group; save premium dollars with managed workers’ compensation plans; obtain regulatory guidance with the added protection of Employer Practices Liability Insurance; and, benefit from tax advantaged 401(k) plans within a PEO model to increase employee attraction and retention. Call now to speak with an agent (877) 426-6320 or contact us on the web to learn more.
Samantha Bond Richman has been working in the employee benefits and administration field for over 32 years supporting employers in a diverse array of industries.