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Q: The school board does not want to issue paychecks but I do not want direct deposit. What can I do?

A: Businesses in Virginia cannot force employees to accept direct deposit. Virginia Code section 40.1-29 B provides that wages/salaries shall be paid "in lawful money of the United States, by check payable at face value upon demand in lawful money of the United States or by electronic automated fund transfer in lawful money of the United States into an account in the name of the employee at a financial institution designated by the employee." The statute goes on to provide the employee must be paid in cash or check if no financial institution is designated for electronic fund transfer.

Unfortunately it is NOT clear that this statute applies to local school boards. Virginia Code section 40.1-29 A refers to an "employer operating a business," and Virginia Code section 40.1-2 does not specifically include state or local government bodies in the definition listing employers. The Virginia Department of Labor and Industries does NOT consider state or local government such as a local school board an "employer" within the meaning of the statute.

VEA will assist members who are concerned about school board efforts to force direct deposit. We will cite the statute as representing public policy that employees should have the choice to be paid by cash or check. More important, we will try to address employee questions and concerns. For example, if employees face bank charges for checking accounts the school board might help persuade local banks to offer free checking accounts for direct deposit. The association has successfully insisted that employees are free to choose their own bank so that the school board is not choosing the bank as well as forcing the direct deposit.

Association members must also be careful to consider good and bad alternatives. Blocking direct deposit may not protect you from change, such as eliminating school delivery of pay checks. An employee who does not participate in direct deposit might be forced into picking up his/her check. That imposes time and expense on the employee.

I hope that association members concerned about direct deposit will follow up with your local UniServ Director for further advice and assistance to address the issue with school officials or the board.


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