Some employers have experimented using debit card payroll systems to decrease their payroll processing and administration costs. Frequently, Texas employers ask whether they can pay their Texas employees using debit cards. The answer is "yes" but only with the employee consent.
Texas law provides that employees must be paid in one of four forms:
- In U.S. currency;
- By written instrument issued by the employer and negotiable on demand at full face value in U.S. currency;
- By electronic funds transfer; or
- In any other kind or form agreed to in writing by the employee.
According to the Texas Workforce Commission advises that Texas employers can pay their employees using debit cards so long as the employees agree in writing and the use of the debit card does not result in any fee charged to the employee. Consequently, employer may be able to reduce their payroll processing expenses via debit card payments but they need to ensure that those means don’t cost the employee anything and the employee agrees in writing to the form of payment.
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