We do have the option of being paid with a check. We are not locked into being paid by direct deposit. What? You think I am some spoiled and entitled person?

Wasn't sure how to read your post. I read it wrong, apparently.

Anyway, I am less concerned with their administrative cost than I am with my bank account.

It is just too much of a headache to do otherwise with tens of thousands of people being paid at different frequencies (weekly, bi-weekly, monthly). But those companies have their own fully staffed payroll and accounting departments that does everything from manage payroll to doing tax filings. Smaller companies (a few to several hundred, to maybe 2,000 employees) may use a payroll company, the larger ones in that group may have a few employees overseeing the process.

Fraud can happen anywhere, even done by trusted employees that handle money accounts in smaller companies. That is why even smallish companies need to have their books audited by a reputable accounting firm.

I have no idea of how to respond to the poster. Some legitimate issues were raised, but if that person examined his entire financial life, he or she would find a large number of potential vulnerabilities.

I know some people here on DU hate large companies, but if a company is going to outsource some activities that involve money, the best choice is to select as large a company as possible to outsource the activity to. The simple reason is the have reputations to lose and also have lots of insurance to cover fraud claims, Billy's Payroll and Tax Management Service typically can't say the same.

...as of a couple years ago. If anything changed there was no notification that I ever received. Honestly, I was quite comfortable with direct deposits until recently. I just want to keep my options open while I have them. If I have them.

It may seem large to you, but truly large companies went away from paper checks years ago.

If they ditched the option of receiving paper checks they did it very much under the radar.

Medium sized companies are 5,000-20,000 employees. Small companies are under 5,000-100 employees. Small and medium sized companies are more likely to use an outside company to perform some of the list of activities that fall under "payroll".

I imagine there are companies that only do direct deposit, but I haven't seen it yet. My current business is world wide, but independently owned.

Like most employment law, states may offer employees more protections than federal law (for instance, California is a very employee-protective state) but if the state hasn't adopted a law, it follows the federal law.

Here's a good explanation: https://payrollmgt.com/blog/can-you-make-direct-deposit-mandatory/

TL;DR Under federal law, an employer can require direct deposit *if* it lets you choose the bank. Or if the employer chooses the bank, the employee must have the choice to get a paper check.

Many companies use a payroll processor to do a lot of things, mostly regulatory things like tax filing and payroll tax transfers. Most companies simply can't afford to have a payroll/tax filing staff.

I think that your direct deposit get charged directly against an account that your employer has set up at a bank. The payroll processor doesn't handle that money. Your employer is more at risk than you are because the company's money for state and federal payroll tax DOES gets handled by the payroll processor. From your standpoint, the only difference between direct deposit and a paper check is a few days of clearance time.

If you do anything, draw cash out of your bank, use your credit or debit cards in person or online, your information is on the Cloud and there have been breeches at some companies that store that information. I just don't know what to say, the only way you are 100% safe is to just withdraw completely from the economic system that we live and operate in.

My apprehension is about the whole cloud-based thing. As far as I knew, my employer was not contracting with that kind of company before they switched over to this one. Maybe I was uninformed and they, in fact, were. I will have to ask now.

Now, that doesn't mean you should relax, it doesn't look like you will fall into that trap. If you take money out of ATMs, your info is on the Cloud (which is just a mass of servers that do everything from activively process information to store other information for a period of time).

You likely will have more of a impact upon your personal financial safety by paying close attention to where you use credit and debit cards. Here is Florida, we have what seem to be a problem with thieves putting skimmers into all sorts of things, gas pumps, ATMs (yes, ATMs), stores. So, I am cautious about where I use my personal cards, if I go to my bank ATM, it is one the bank employees have likely opened and checked not long before I use it, I don't use more remote drive-up ATM and I don't use ATMs in convenience stores and grocery stores).

Frankly, I feel as though I am gradually being sucked into things that I never consented to or signed up for. Just having to decide which ATMs to use or NOT use is not something I ever anticipated. ATMs were supposed to be all about convenience but maybe not so much.

Paper check is not an option.

Probably "the cloud"

Shoot their guns at the clouds

Are you going to make sure that whatever bank you switch to ... doesn't use the cloud? That would be far more important if protecting your banking info is tantamount. All a payroll company has is how much $ you get paid and probably your social and address. Your bank has that and a LOT more.

Do you ever buy things online? Do you make sure the companies you give your debit or CC info to ... don't use a cloud for anything?

Do you have a retirement account or similar? Do you make sure that company doesn't have your info in a cloud?

Does your Health Insurance company use a cloud? Your doctor's office? Would you avoid a hospital if you knew they kept records on a cloud? How about your car insurance and homeowners insurance companies?

Do you use Turbo Tax? Intuit is a major client of AWS. If you haven't used it, is it because they use the cloud?

You see where I'm going with this?

This company is the one that I KNOW is operating in the cloud, because they told us at a "roll out" meeting. I was not the only person in the room who was taken aback and apprehensive. I can only control what I can control and the point of this thread was to determine if this is something that I can have control over.

already on the Cloud. Your current and new bank likely has or will have your info on the Cloud. The Cloud is just a massive collection of servers. Your employer could insist that the new company keep people's information in their main office, which would be a far less secure location than on the Cloud. My bet? You are creating far more risk for yourself by how you use your credit card and/or debit card daily than you have with your account information being on a massive server collection.

Not unless you can convince 'Corporate' NOT to use this payroll company.

The transmittal of your direct deposit is a trivial part of the process. If there is ANYTHING in the world that is locked down beyond the potential of any hackers, it's the transmittal of money. And your bank is NOT going to allow this company (or some hacker pretending to be the company) to take money OUT of your account. And if that happened I'd think your company (or the bank) would make you whole. Ergo. that's the last thing you need to worry yourself about.

However, unless you have a very unique setup at your company where checks are cut directly by your company, all your payroll information will be 'in the cloud' regardless of whether you take a paper check or use direct deposit, because the payroll company is the one who calculates your check and prints it. It would be odd for a company to have the sort of redundancy you'd require to avoid that. Though I suppose you could ask your manager if it's possible to get your check in this special way. Be prepared to hear 'no' because the payroll company needs that info cause there's all kinds of financial reports that run off those numbers ...

I log in to my credit union, take a picture of the front and back and hit deposit.

I have never had a problem with this.

I did get hacked by Citi and BofA of which I never have done business.

They gave out loans in my name based on an e signature.

Good luck....

And the 21st century is calling for ALL of us. We will all need some luck.

it's Direct Deposit only.

You sound like me. I have not been a fan of it but since all my jobs for the last several years I worked and now that I am on SSDI, I had go with it anyway. It made me get a debit card too. This week I had to go with another thing I absolutely despise, a smart phone. So far I can dial out and answer calls and texts, that;s really all I want anyway so until I find someone who can show me how to use anything else, that's where my investment in a smart phone ends for now.

.

The direct deposit function is separate from where their information is stored. Your employer's payment services will still have most of your information anyway. Many of those Fed processes would be separate. Somewhere along the line, your banking information will be in a cloud, whether you planned it or you mailed a check and the payment processor ties it to your financial account.

Back-end private clouds are fine. A cloud is just fancy terminology for storage arrays. It's how they are implemented that matters. Back-end systems are secure, especially if a three-tier topology is used with a DMZ in the mix. Internet-connected vendor or corporate clouds are the ones that have risks and those companies will have indemnity insurance to cover mass data breaches. It's not if your data will get compromised, when using an internet-connected cloud, but when and how severe. Most fines for data breaches are per record, up to a maximum. Once that limit is reached, the fine does not go higher. So, as a hypothetical example: if it's $1K per exposed record, there might be a cap of 500 records, or $500K in fines for a single event. So if there are 500 records exposed or 1 Million, the fine will still be $500K. It's to prevent a firm from going bankrupt over one event. Now, that was the bad stuff.

The benefit of direct deposit is that it is insured, since the Fed is the one sending the money into your account. So if you write checks on a Friday, that money is guaranteed to be there Friday, the bank won't come after your for the overdraft fees. Plus, you actually have more risk having checks mailed or manually handled, less risk of an accident going to the bank to deposit it, no waste of time, fuel, etc. It's like the thought of mailing payments to banks and credit card companies instead of paying them online because of security risks. There is more risk having paperwork that could get lost, held by a week by the payment processor in the hopes you mailed it close to your due date to ensure a late payment fine and increases in interest rates, and the trust they will shred the mailed documents. It's best to pay online with a secured system, as most payment centers use the same systems that your web payments use, some just changing different load-balanced servers to enter.

If you are really worried, just have two accounts and have the money go into account A and then transfer it to account B. You can even set up automatic transfers with your bank.

.

...to digest it all but thanks for your thoughtful response. Unlike a couple others in this thread.

Don’t trust “the system”!!!

Don't know where you think you're going with that bit of nonsense.

Shouldn't you demand actual cash? (preferably cows; who really trusts paper money?)

I've had direct deposit for 30 years;likewise, my 401(k) and 457 deposits haven been automatic. I'm doing quite well.

There is a post there where I clarify (sorry if I wasn't clear before) that it is NOT direct deposit that I distrust. What I have a problem with is a system that can allow someone to take money OUT of my account as easily as put it IN.

And has been for years. Every bit of your banking account info is stored electronically in some Data center and likely replicated at others for redundancy and availability. It's as secure as you are going to get in today's world.


I have used direct deposit, and online banking for 20+ years and have never had an issue. I get paid faster and can view my check stubs, withholdings, benefits, and W2s for the last umpteen years. I also can distribute my take home into up to 3 accounts, so I can divide my check - by percentage or set amount - and am always saving a little cash every pay period period.

If you do your taxes electronically or through a service, all of your tax info can be imported and entered in the appropriate boxes automatically.

If you work for a large company, I'd guess they use ADP. They are not going to close and make off with payrolls. Your company would likely be insured if they did.

Try it. If you don't like it, stop it.

Way back in the day (1970s), the medium sized company I worked for went to direct payroll deposit with strong encouragement for everyone to switch over. After a few months, word started to get around that there were a couple of hold-outs, and one being a VP in the company.

I had the occasion to ask a manager in the accounting dept exactly why one would not want to switch over (as it seemed a bit of a mystery to me - I could see no downside at all) and he said because they don't want their wives to know how much they are making!

I worked at a major NYC hospital for several years back in the day. In addition to offering direct deposit - augmented by no fee transaction / checking from our bank with bank ATM's provided at the main facilities - we also had onsite check cashing. It was a longstanding holdover benefit from a union contract, which we could not convince them to give up, at least while I working there.

The service wasn't inexpensive. It also felt like a calamity waiting to happen, given that there was a $1,000,000 in cash sitting in a room on the premises every two weeks.

When I asked our controller who the main users of the check cashing services were, he told me that non-union employees were disproportionately represented. And that whenever he asked one of them why they did so, they told him that they didn't want their partners/spouses to know everything about their finances.

makes you wonder what kind of relationship they had with their SOs. I little transactional I would think.

There are cases (many?) in which the wives have no idea how much their husbands are making or have in the bank - all they see is a monthly allowance to run the household. Kinda sad IMO....

The data is transmitted through a heavily encrypted file that routes through an ACH clearinghouse. Checks take way longer to clear and the images are transmitted through the Federal Reserve on a different encrypted file. Your data goes through clouds regardless of which route you go. All you would accomplish is adding a few days before your money is available. Later this year ACH will be moving even faster so you can get your hands on your money sooner.

I have been managing aspects of direct deposit for two decades at banks and credit unions. I can assure you that you have nothing to fear with direct deposit. It has been around since the 1970’s and has never been safer than it is now.

...is making me nervous. It is the company itself that is handling things. I only started to worry after I read reports about a similar company making off with millions of other people's money. This was just a few months ago. I will have to Google it and see how things turned out. I hope those people were made whole.

On edit: In the case I am referring to, fhe company not only made off with payroll but also took money OUT of people's bank accounts.

You are insured. As long as those victims filed claims with their institutions within 60 days of those transactions appearing on their statements, they received full refunds. The liability belonged to the bank of that payroll company.

Your data is in the cloud.

OH sure it's possible that your employer is old fashioned and runs the entire payroll service inhouse, including printing and delivering checks.

But almost no one does that anymore and the ones that are, are trying to get away from it. The complexity of regulation and tax laws across hundreds of jurisdictions is no longer economically manageable to do in-house except for large government employers and payroll service companies.

And EVEN if your employer is doing payroll 1970's style. They still transmit all your payroll data to the IRS and States electronically.

It's pretty close to impossible to nowadays to do paper only payroll.

Also - if your employer is going to shutdown and take the payroll. Having a paper check only makes it MORE likely that you'll lose the payroll. (Checks can be stopped, but direct deposit cannot)

And will stay there, even if they allow you the option of getting a paper check. Because the company doing the processing has its data interface over the cloud and very likely stores its data there, heavily encrypted. If not as a primary storage, almost certainly as a backup.

Your employer transmits the payroll data, including your changes to withholding and deductions, vacation or flextime usage, etc., for every pay period, to them via the cloud. They access it there and process the remittance for your pay the same way whether it's your direct deposit info or cutting a paper check.

If you've already had direct deposit for quite a while, you can be certain that your bank processes and transfers funds using your account information in some kind of cloud-based system as well, especially if your bank offers (and you use) services such as online account access, paperless statements, online bill pay, etc.

It may work just fine for you to go back to paper transactions for your paycheck deposit, especially if you're conscientious about keeping a reasonable cash float in the account and/or have good overdraft protection.

But do keep in mind that most banks require a 24-48 hour delay for access to funds at a minimum with direct deposit, and with paper checks that will stretch to 3 days or more- so if you're down to the wire in your cash account and you dump a paycheck in, you may still need to wait several days to access the funds- or end up with an overdraft and the associated fees.

helpfully,
Bright

a second account just for your direct deposit and then write checks to yourself and deposit them to your bank account in use now. But there would likely be a monthly charge.

In the end you are likely to be quite safe now as others point out. Banks are well aware they are under constant attack.

When I first enlisted, everyone lined up outdoors and got paid in cash money by some non-com, with an armed security guard standing nearby. That seemed rather old-fashioned to me at the time, but then I realized that it was all a bunch of young guys at a temporary base they were stationed at. They didn't have bank accounts there. So, we got paid in cash, right down to the penny.

Later, we got checks. But that was too long ago for direct deposit of pay. These days, I appreciate those my clients, and the SS administration for depositing money directly into my checking account. It's always there on the day it's supposed to be. I still have one client who pays me by check. A couple of times each year, that check ends up in my neighbor's mailbox when the USPS carrier is not paying enough attention. Fortunately, my neighbor walks it over and puts it in my mailbox.

...that I have a problem with direct deposit. I was thinking about the case at the link below when I posted.

https://www.cbsnews.com/news/payroll-company-mypayrollhr-allegedly-diverts-35-million-from-employees-causing-employers-to-panic/

My problem isn't with how money goes INTO my account. My fear is about how it can come OUT if the payroll company has access to my bank info. If I do the depositing myself then that would be one less worry. Also, the payroll company we are dealing with was screwing up some of our pay for a few weeks, which was another thing that made me apprehensive in addition to the news story at the link.

happens. I can't worry about rare events too much. I just can't.

I only worried about it because this happened within a month of my employer contracting with this new company and the company was botching our pay. They seem to have gotten a handle on things but I am still a bit wary. I hadn't been thinking about it much until last night. Couldn't really tell you what made me start fretting about it again suddenly.