Mandating direct deposit
In some states, receiving direct deposits can even be included as a condition of employment.
However, even these states have some restrictions you need to know.
Also, when you hand an employee a physical check, there's a lot of information on it that is exactly what a fraudster is looking for: business name and address, routing number and an authorizing signature.
And, shocking as it might seem, for the beginning fraudster, there are helpful You Tube descriptions of how to go about signature forging. Statistics vary from one source to another, but the variation ranges from the low 80- to high 90-percentiles.
For an employer, it is a lot cheaper to make payroll payments on a computer than to write – and sometimes mail – payroll checks to employees.
Direct deposit also creates a seamless record of all payroll accounts, saving more time and money when business expenses are analyzed.
Just as forgers can easily create and cash fake checks, hackers can get into the ACH system and quickly make huge withdrawals from an employer's bank, to the tune of perhaps hundreds of thousands of dollars, before the crime has been detected.Federal law does not mandate pay stubs for workers, but the Fair Labor Standards Act requires employers to keep accurate records of employees’ wages and hours worked.