Is it legal if my employer is forcing its employees to use their financial services?

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Is it legal if my employer is forcing its employees to use their financial services?

We are required to use either direct deposit into one of their accounts or use a paycard provided by them. I have asked if i can continue to receive a paper check or direct deposit into another bank and they say no unless you live 27 miles from one of their banking centers.

Asked on January 7, 2012 under Employment Labor Law, Michigan

Answers:

MD, Member, California Bar / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

This may be similar to employees required to buy clothing from its stores to wear while working. I am not sure if this is illegal. In most locations, people are going away from the paper checks and are requiring employees to use direct deposit. It may be best to look at your handbook and manual when you signed up to see if part of your employment agreement was the requirement to use the company's financial services. You may not be forced if the manual is silent on it. Ask the personnel department if you can get an explanation for this requirement and what allows the company to force it. If required, try to set up the direct deposit into your account there and an automatic withdrawal into your own bank account.


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