​​​Direct Deposit - Mandatory

It is the policy of the State of Idaho that all employees paid by the State Controller’s Office (SCO) be required to use the Direct Deposit feature to receive payroll related payments. In accordance with state and federal requirements regarding Direct Deposit of payroll, the employee may select an eligible financial institution of his/her choice to accommodate the receipt of Direct Deposit payments.
Established requirements, exemptions, and deadlines:
      All employees employed prior to August 1, 2009, and paid by the SCO, receiving his/her pay by Direct Deposit shall continue to participate in the Direct Deposit feature.
      All employees employed prior to August 1, 2009, and paid by the SCO, who are receiving his/her pay by paper warrant (check), shall be required to participate in the Direct Deposit feature.  These requirements must be met by September 1, 2009, and are as follows:   1) identify an eligible financial institution that will serve as a personal depository for the employee or 2) be granted an exemption by the State Controller for reasons stated below. 
      All employees newly hired or appointed to a position on or after August 1, 2009, shall be required to participate in the Direct Deposit feature.  These requirements must be met within 30 days of the hire or appointment date and are as follows:  1) identify an eligible financial institution that will serve as a personal depository for the employee or 2) be granted an exemption by the State Controller for reasons stated below. 
An employee may be exempted from participating in the Direct Deposit feature if he/she does not have an account at an eligible financial institution, and further provides evidence that he/she cannot obtain an account at an eligible financial institution.
In the role of prescribing the manner in which agencies make disbursements, the State Controller has exclusive authority to grant any exemption from the Direct Deposit requirement. A personal exemption may only be granted for the reason stated above (i.e., unable to acquire an account at a financial institution) or other specific situation that the State Controller may deem to be an extreme hardship. An employee desiring to request an exemption from the Direct Deposit requirement shall do so by completing a Direct Deposit Personal Exemption Request Form.
The State Controller may allow a business exemption for Direct Deposit to accommodate an individual agency or the SCO business needs including, but not necessarily limited to, reissued warrants, corrected payments, and employees not eligible for Direct Deposit.  Distribution of checks for a business exemption shall be determined by the State Controller. If an agency has employees that need to be exempted for business reasons from the Mandatory Direct Deposit Policy, the agency must send a written request stating the employee’s name and the reason for the exemption. This request should be sent to the State Controller’s Office, Attention: Division of Statewide Payroll.
For those employees who are granted an exemption, the State Controller may secure and offer other payment methods as options, other than paper warrant (check), when such options may become available.
Beginning September 4, 2009, all employees not participating in the Direct Deposit feature will continue to receive a paper warrant (check).  Such paper warrants (checks) shall be mailed by the SCO on the employee’s designated payday (check date).  No paper warrant (check) shall be mailed prior to the designated payday.  To avoid delays in the delivery of these paper warrants (checks), any employee receiving his/her pay in this manner shall be required to provide and maintain a valid mailing address with his/her agency human resources or payroll representative.
 
Authoritative References
Duties of the State Controller
IC § 67-1001 (1) To superintend the fiscal concerns of the state, with its accounting, informational, payroll, and related data processing services.
 
IC § 45-608(1) provides that “Nothing contained herein shall prohibit an employer from depositing wages due or to become due . . .in an account in a bank, savings and loan association or credit union of the employee’s choice, provided that the employee has voluntarily authorized such deposit.” (emphasis added). However, for public employees, one should note that the definition of an employer does not include a public entity. Therefore, public employees could be construed as not falling under the provisions of the Idaho Wage Payment Act. 45-601(5)
 
Regulation E issued by the Federal Reserve System pursuant to the Electronic Funds Transfer Act (15 U.S.C 1693 et seq.)
 
Explanation of Policy
This Policy is intended to maximize the utilization of electronic payments and to minimize the number of paper warrants (checks) issued by the State, thereby obtaining efficiencies for the State and providing employees with a reliable and efficient manner of receiving their pay.
 
Scope
This Policy applies to all state employees paid through the SCO payroll system.
 
Effective: August 1, 2009
Version: 7.31.2009