Back in November 2016, the podcast Smallbiz Brainiac talked about paycards. Though the podcast gets some things right about payroll card state laws, his general assumption that paycards aren’t worth the hassle is a passing observation that’s just wrong. Sure if you run a really small business, it may not be worth it to setting up a paycard program just to get one or two employees on direct deposit, but for most of the companies in America it’s worth it.
What Smallbiz Brainiac gets right:
Their research on state Paycard laws and the fact that laws can be tricky to navigate sometimes
SOLE has a Paycard Laws Map to help you navigate the laws state-by-state
The details of rolling out a paycard program
That employees set up with a paycard can get paid via direct deposit
What Smallbiz Brainiac gets wrong:
The fees he describes don’t apply to all paycard programs
They did the research on Paycard laws, but did not do enough research on what unbanked employees get out of having a paycard.
Assuming paycards aren’t worth the hassle
Unbanked employees don’t want to banked
This is an assumption he made about the unbanked population, there are numerous reasons why a person is unbanked. For more info, read: What Is Driving The Unbanking of America
In the podcast he says that you as an employer shouldn’t get involved with your employee’s finances. Yes, you should get involved with your employee’s finances, because it benefits your employees and your business.
Why paycards are worth it for employees
No longer have to go to a check cashing location to get their paycheck
No longer have to go to locations to pay their bills, they can pay their bills online with their paycard
Can now purchase things online with their paycard
Can get their tax return direct deposited on their paycard
Can make everyday purchases with their paycard
Use the SOLE Paycard App to check their balance
Employees can get paid on holidays, long weekends, inclement weather and postal holidays
Why paycards are worth it for employers
Save time and money on distribution of payroll
Employees don’t have to spend their time off work, working to get their money by going to check cashing locations and running around paying their bills in person.
Issues with lost/stolen paper checks
Eliminate natural disaster paper-check deliverability issues
Really it’s not that much work rolling out a paycard program. If it seems like it’s too much work, give us a call and we’ll walk you through the steps to start a payroll card program. No matter how you pay your employees you’ll still have to follow federal and state laws. Why not pay them in a way that saves them time and money. Yes, setting up a paycard program can take a bit of time, but in the long run it’ll save you and your employees time and money.