A recent opinion letter issued by the Oklahoma Attorney General allows employers to require wage payment by direct deposit but not by payroll debit card.
This opinion letter overturns a former ruling, that Oklahoma employers could not require payment by direct deposit.
An Oklahoma employer may require that an employee accept payment of wages by direct deposit, under this new ruling. However, the employer cannot require that the employee use a certain bank for wage payment. The employee must be free to use a bank of his or her choice for payroll deposits.
If an Oklahoma employer had a policy allowing employees to receive payroll direct deposits only on a certain bank, then the employer must offer another option for wage payment. That option may be a payroll check, or payment in cash, or either. For example, a small bank in Oklahoma might require that if employees use direct deposit, it be into an account at their bank. However, because the employer sets such limits, the bank must offer employees an option between direct deposit and another form of payment: cash or paycheck.
On the other hand, a business in Oklahoma that allows employees’ wages to be direct deposited into an account at any bank, is under no obligation to offer paychecks as well.
However, an employer still cannot require payment by payroll debit card only. An employer can offer payment by debit card, but must also offer another payment option to employees, according to the Oklahoma Department of Labor.
In the same ruling, Oklahoma Attorney General Drew Edmondson determined that wage statements (or pay stubs) do not need to be in writing; they can be electronic if this form of delivery places no burden on the employee. However, posting wage statements on a website requiring employees to login with a password would not be lawful – because there is a burden, however slight, on the employee in obtaining this information. The Attorney General did not give an example of an acceptable form of electronic wage statement.
According to the Attorney General, this ruling reflects the fact that federal law overrides state law in some circumstances. In this case, the federal Electronic Fund Transfer Act or EFTA specifically overrides some provisions of Oklahoma law that forbid wage payment by mandatory direct deposit. While state law does not allow employers to mandate direct deposit, in the Attorney General’s opinion this is overridden by the federal law. However, he takes pains to note that other provisions of the Oklahoma law are still in effect, because those issues are not addressed by the federal law.
