Employee: Electronic Payment of Wages


At long last, the Oklahoma Department of Labor has revised its position on electronic payment of wages to reflect common practices and a more accurate interpretation of the law. The ODOL website now advises viewers that an employer may require employees to accept wage payments by direct deposits to bank accounts. Although the payroll statute was modified in 2006 to allow payment by electronic means, the ODOL consistently took the position that direct deposit was always at the employee's option. The ODOL based its position on an Attorney General's Opinion from 1966, an era in which direct deposits were unknown. Fortunately for employers, the Attorney General has issued a new Opinion, based in large part on the federal Electronic Funds Transfer Act. Federal regulations issued under the EFTA provide that an employer may require direct deposit of wages by electronic means as long as the employee is allowed to choose the institution that will receive direct deposits. The Opinion warns, however, that the EFTA prohibits an employer from requiring an employee to receive wages through a payroll card account. This is a payment option left entirely to the employee.

The Opinion, which was requested and has been adopted by the Oklahoma Commissioner of Labor, goes on to discuss pay stubs. The Oklahoma statute requires that an employer must issue to each employee a brief itemized statement of any and all deductions from the payment of wages. Although the ODOL had in the past taken the firm position that this statement of deduction must be given in paper form, the Attorney General's Opinion interprets the statute differently. According to the Opinion, the form in which this statement is given will depend upon the ability of the employee to receive it. So, if your employee provides you with an email address, you may issue an electronic pay stub by email. The Opinion warns, however, that it is not permissible to merely place the statement on a website where the employee will have to retrieve it.

What do you do if the employee does not have (or doesn't want to provide you) an email address? Some employers have coaxed their employees into accepting electronic pay stubs by providing the information before payday so that problems can be worked out in advance, by providing additional information on the electronic pay stub, or providing the paper pay stub only through the mail, rather than through office distribution. Other employers have assigned all employees an email address within the business and established a kiosk at the workplace so that those employees who don't sit in front of a computer all day can then check their email for their electronic pay stub.

Now that the ODOL has reluctantly adopted electronic pay stubs, we expect more employers to use them. They're green and save you money.

By Rebecca M. Fowler, rfowler@dsda.com

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Justin B. Munn

Justin B. Munn

Justin represents clients throughout Oklahoma in family law, civil litigation, guardianships, adoptions, estate planning, trust and probate matters. 

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