Can an employer require me to open an account at a specific financial institution for direct deposit?

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Can an employer require me to open an account at a specific financial institution for direct deposit?

I have recently been offered a new job at a local credit union. Upon completing
my new hire paperwork, I was told that they require direct deposit into one of
their own credit union accounts. While I understand that direct deposit can
legally be required, I thought that federal labor laws stated that direct deposit
can only be required if the employee can choose the institution the funds will go
into. I was basically told in order to get a job with them, I had to open a
savings account with the credit union. They offer no other way to receive
paychecks, so it is a condition of employment.

I am hoping you can clarify this for me. Can they legally require me to open an
account at their specific financial institution in order for me to become an
employee?

Asked on August 15, 2017 under Employment Labor Law, Wisconsin

Answers:

M.D., Member, California and New York Bar / FreeAdvice Contributing Attorney

Answered 4 years ago | Contributor

Under federal law, an employer cannot require that its employees use any particular financial institution for receiving direct deposit of wages. However, this does not prevent an employer from requiring direct deposit so long as the employee chooses the receiving bank. That having been said, an employer may give its employees the option of having their salary deposited at a certain institution designated by the employer or receiving their salary by another check, cash, etc. At this point, you can contact your state's department of labor and/or an employment law attorney for a further explaination of your rights.


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