Direct deposit made life easier for employees, eliminating the Friday lunchtime run to the bank to cash paychecks. Pay cards take it a step further by marrying convenient deposits with ease of spending.
Pay cards are reloadable, prepaid bank cards—not credit cards. Each pay period, the employee’s pay is automatically loaded onto the card and available to the employee on payday.
Most states prohibit employers from mandating that employees receive their pay electronically—the banking basis of pay cards. Similarly, only a few states let employers mandate direct deposit. Many states also forbid employers and banks from charging a fee if employees decide cash out all their pay with one transaction.
Here’s a brief summary of state laws affecting direct deposit and pay cards.
Note: States not listed have no laws governing direct deposit or pay cards
Alaska
- Direct deposit: Voluntary
- Pay cards: No law
Arizona
- Direct deposit: Voluntary; employees get 1 free withdrawal, pay statements
- Pay cards: No law
Arkansas
- Direct deposit: Voluntary; employees opt out via written, signed letter
- Pay cards: No law
California
- Direct deposit: Voluntary; employees pick in-state bank
- Pay cards: Voluntary; employees get 1 free transaction, pay statements
Colorado
- Direct deposit: Voluntary
- Pay cards: Voluntary; employees get free access to full pay or may choose another payment method
Connecticut
- Direct deposit: Voluntary
- Pay cards: No law
Delaware
- Direct deposit: Voluntary
- Pay cards: Voluntary; employees get free access to full pay
District of Columbia
- Direct deposit: Voluntary
- Pay cards: No law
Florida
- Direct deposit: Voluntary
- Pay cards: Voluntary; employees get free access to full pay; in-state bank
Georgia
- Direct deposit: Voluntary
- Pay cards: No law
Hawaii
- Direct deposit: Voluntary; disclosure required
- Pay cards: No law
Idaho
- Direct deposit: Voluntary
- Pay cards: No law
Illinois
- Direct deposit: Voluntary
- Pay cards: No law
Indiana
- Direct deposit: Voluntary
- Pay cards: No law
Iowa
- Direct deposit: May be mandatory for new hires; employees incur no bank charges; voluntary for everyone else
- Pay cards: Voluntary; employees get free access to full pay
Kansas
- Direct deposit: May be mandatory; alternative pay method must be offered; disclosure required
- Pay cards: May be mandatory; alternative to direct deposit; employees get free access to full pay; disclosure required
Kentucky
- Direct deposit: Voluntary; employees get pay statement, incur no fees
- Pay cards: No law
Louisiana
- Direct deposit: May be mandatory; employees incur no fees
- Pay cards: No law
Maine
- Direct deposit: Voluntary; employees get pay statements
- Pay cards: Voluntary; employees get free access to full pay, pay statements
Maryland
- Direct deposit: Voluntary
- Pay cards: Voluntary; disclose fees
Massachusetts
- Direct deposit: Voluntary employees pick bank
- Pay cards: No law
Michigan
- Direct deposit: May be mandatory; employees pick bank
- Pay cards: May be mandatory if employees don’t elect direct deposit; employees get 1 free transaction; disclosure required
Minnesota
- Direct deposit: May be mandatory unless employees object in writing
- Pay cards: Voluntary; employees get free access to full pay; disclosure required; employers register with the state
Montana
- Direct deposit: Voluntary
- Pay cards: Voluntary; employees get free access to full pay and pay statements; disclosure required
Nevada
- Direct deposit: Voluntary; employees get 1 free transaction, incur no fees
- Pay cards: Voluntary; employees get free access to full pay; disclosure required
New Hampshire
- Direct deposit: Voluntary; employees incur no fees
- Pay cards: Voluntary; employee get free access to full pay; disclosure required
New Jersey
- Direct deposit: Voluntary
- Pay cards: Voluntary; employees consent in writing; get free access to full pay; disclosure required
New Mexico
- Direct deposit: Voluntary
- Pay cards: No law
New York
- Direct deposit: Voluntary; may be mandatory for exempts earning more than $900 a week
- Pay cards: Voluntary for nonexempts; employees get free access to full pay
North Carolina
- Direct deposit: May be mandatory; employees choose bank
- Pay cards: May be mandatory; employees get free access to full pay; if voluntary, fees begin on 2nd withdrawal
North Dakota
- Direct deposit: Voluntary
- Pay cards: Voluntary; employees incur no fees
Oklahoma
- Direct deposit: May be mandatory if employees pick bank, otherwise voluntary; pay statements required
- Pay cards: Voluntary; employees incur no costs; pay statement required
Oregon
- Direct deposit: Voluntary; employees incur no fees
- Pay cards: Voluntary; employees get free access to full pay
Pennsylvania
- Direct deposit: Voluntary; employees get record of deposits
- Pay cards: No law
Rhode Island
- Direct deposit: Voluntary
- Pay cards: No law
South Carolina
- Direct deposit: Voluntary; employees get pay statement, 1 free withdrawal
- Pay cards: No law
South Dakota
- Direct deposit: Voluntary
- Pay cards: No law
Tennessee
- Direct deposit: May be mandatory; employees pick bank
- Pay cards: May be mandatory if employees don’t elect direct deposit; employees get 1 free transaction; disclosure required
Texas
- Direct deposit: May be mandatory; employer gives 60 days’ notice
- Pay cards: Voluntary; employees get free access to full pay
Utah
- Direct deposit: May be mandatory, if for preceding year employer deposited at least $250,000 in federal taxes and 2/3 of employees elect direct deposit
- Pay cards: Voluntary; employees get free access to full pay and pay statements
Vermont
- Direct deposit: Voluntary
- Pay cards: Voluntary; employees get 3 free transactions; disclosure required
Virgina
- Direct deposit: Voluntary; employees incur no fees
- Pay cards: May be mandatory for amusement facility employees and all new hires
Washington
- Direct deposit: May be mandatory if employees incur no fees
- Pay cards: No law
West Virginia
- Direct deposit: Voluntary
- Pay cards: Voluntary; employees agree in writing
Wisconsin
- Direct deposit: May be mandatory, if in-state bank, employees incur no fees
- Pay cards: No law
Wyoming
Direct deposit: VoluntaryPay cards: No law
