Automatic Data Processing Inc., which does business as ADP, is providing multistate companies with a payroll system that complies with the electronic payroll regulations of all 50 states.
ADP’s Aline Pay gives employees the option to receive wages either through direct deposit to a bank account or through a prepaid account accessed with a Visa-branded payroll card. Employees also may choose to receive funds through what ADP calls its Aline Check.
“We tried to create the program so it’s focused and provides simplicity to not only employers but to those who choose the card,” Gary Lott, general manager and division vice president for ADP Unemployment, Payments and Garnishment Services, tells PaymentsSoure.
ADP’s partners had been asking for a more complete product to shift to a full electronic payroll, Lott says. But before that could occur, the Roseland N.J.-based company worked with regulators to pinpoint the requirements each state had pertaining to electronic payroll products.
“The regulatory landscape can lend itself to clarity in some jurisdictions and not so much in others,” Lott says.
Multistate employers using the system can meet termination pay and “pay to the penny” requirements in different states.
“Pay to the penny” means employees have access to their full paycheck without fees. For example, Aline cardholders could withdraw $880 from an $893.52 paycheck. To access the remaining $13.52, they would use an Aline check and cash it for free at participating major national banks, which vary by state.
ADP is positioning the payroll card as a key piece of its new offering.
The card features surcharge-free ATM access through the Allpoint or MoneyPass networks and at PNC Financial Services Group Inc. machines.
Cardholders also may load additional funds into their card accounts through Green Dot Corp’s retail reload network for free, though retailer fees may apply. Employees also may receive other electronic payments deposited into their accounts, such as government benefits or tax refunds.
The card comes with no monthly maintenance fee, and all purchases are free. Online bill pay is offered at no charge, and the out-of-network ATM fee is $3.
First California Bank issues the card, and Visa’s Debit Processing Service processes the transactions. PIN-networks brands on the card include Visa’s Interlink and Plus.
Companies increasingly are turning to electronic payroll services to reduce costs, notes Nancy Atkinson, a senior analyst with the Aite Group in Boston. Employers also realize checks are still a problem for some employees, she adds.
“There’s a movement in that direction, especially to the degree that they can deal with the unbanked to make sure those employees have access to their money,” Atkinson says.
Anthony Peculic, ADP senior director of product marketing, says the company was able to help a quick-service restaurant with some 55,000 employees save $1.5 million by converting the majority of the workers to electronic payroll.
ADP is centering its marketing efforts for the service around the ease of use and ability for employers to cut costs, Peculic says.
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