reprint from HR.com
By Gary Lott, ADP
Gary Lott, General Manager for ADP wrote this article which was published by HR.com. In this article Gary outlines how Payroll Debit Cards are not just beneficial for employers, but also the employee. He outlines some of ways that the cards are being used by employees. Here is the article:
By: Gary Lott, ADP, TotalPay® Card
Summer is an ideal time for employers to take advantage of temporary help with many high school or college students looking to make money before heading back to school. What many of these workers are finding is that companies are not paying them by check, but by payroll debit cards.
Payroll debit card programs offer a convenient and cost effective way for employees to access their pay. Each pay period, the payroll debit card is automatically loaded with the full or partial value of the employees’ paycheck. This enables workers to use their card to make purchases, to receive cash back at retail outlets, and to obtain cash at ATM machines – up to the amount available on their paycard.
For employers, payroll debit cards help ease the costs associated with payroll processing as companies spend billions of dollars annually in administering and printing paper checks. Given the benefits to both employers and employees, it’s no surprise that many payroll service providers, like ADP, are finding employers across all markets adopting payroll debit cards.
Payroll debit cards started off as a pay vehicle for clients in the food service, retail and construction industries and as a solution for the under-banked employees. They have now become more prominent in businesses such as hospitality, security, transportation and logistics, call centers, manufacturers, supermarkets, nursing and healthcare. In fact, paycards are now being used by employees who receive their pay via direct deposit as they use their paycard to budget (discretionary spend goes on the card) or as an allowance tool for their teenage children.
Technology has paved the way for employers to offer faster, safer and easier ways to pay their employees. The payroll card is no exception. Following are key benefits employees will enjoy when using a payroll debit card.
Benefits of a payroll debit card:
Choice: If employees don’t have a bank account, they must often rely on expensive check cashing stores, which charge customers a percentage of the value of the check to be cashed. Payroll debit cards eliminate check cashing fees. Additionally, payroll debit cards give employees the option to purchase products at most retailers – be it at the store, online, or over the phone.
Security: Payroll debit cards eliminate the need to carry large amounts of cash, which can be subject to loss or theft.
Convenience: If an employee travels often or doesn’t work on payday, a payroll debit card can give him immediate access to his pay on payday, since there is no need to pick-up a paycheck or make a trip to the bank. Also, if a card is lost or stolen, it can be easily replaced.
Budgeting: The payroll debit card can be used as a budgeting tool. Employees can designate a portion of their salary to the card to be used for anything they choose, such as vacations or holiday shopping. In addition, employees can give a card to a member of their family with a pre-set amount of money to spend in order to maintain a budget or teach about budgeting. This has become very popular with employees providing a second card to a teenage child.
As more businesses adopt payroll debit cards as an additional benefit offering, employees will have more flexibility when managing their daily financial affairs.
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