Alert to Middle Class Blue Collar Workers on a Week to Week Payday to Payday Budget

by on July 28th, 2010
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If you are one of the millions of hard working middle class blue collar Americans most likely the company employing you has had a system in place for direct deposit payroll for quite some time now. In fact, at many companies you can no longer even receive a paper check anymore. The only way to receive compensation, your wages for services rendered, your payment for your hard work, is to accept the direct deposit arrangement. Recently they have even given the option to receive wages through the use of a bank card, which has already given rise to questionable payday advance loan practices.

My husband has been with the same employer for over a decade now, and this arrangement has actually been very convenient in my opinion. The practice spread and was quietly accepted by responsible blue collar middle class Americans around the nation. According to initial research direct deposit payroll systems have been implemented by approximately 94% of U.S. Employers. No more Friday get your paper paycheck and go to the bank to receive cash in hand; everything is done through electronic transfers now.

For years now hard earned wages equivalent to cash money, as stipulated by federal law which states: Weekly payment of wages. Exemptions. (Sec. 31-71b). (a) Each employer, by himself, his agent or representative, shall pay weekly all moneys due each employee on a regular pay day, designated in advance by the employer, in cash, by negotiable checks or, “upon an employee’s written request, by credit to such employee’s account in any bank which has agreed with the employer to accept such wage deposits”. (b) The end of the pay period for which payment is made on a regular pay day shall be not more than eight days before such regular pay day, provided, if such regular pay day falls on a non-work day, payment shall be made on the preceding work day.

Remember these key phrases as you read on:

or “upon an employee’s written request, by credit to such employee’s account in any bank which has agreed with the employer to accept such wage deposits”

Which in turn can effect this one

“(b) The end of the pay period for which payment is made on a regular pay day shall be not more than eight days before such regular pay day”.

The pay has gone into the accounts in a smooth, timely manner, in some cases even early, for example a Friday payday I would often find to be credited through the bank on a Thursday afternoon. This arrangement has worked well for many, for a long time. Wages paid go into bank accounts, and the bills paid go out of bank accounts, smoothly, as scheduled in middleclass homes across the nation every weekend. Many of us have accounts, for example mortgage payments set up for auto pay On Pay day.

This is Friday for the more mature and responsible among us. Friday is not go out and party night, it is the opportunity to take a breath and heave a sigh of relief. You have made it through another week, you have paid what you needed to (or what you could), you know who is paid, and you know exactly what you have available to make it through the next week…. until the next payday.

Recently though over the past two months or so some of the big banks, which I will not bother naming, but mine is one of them, sent out notices regarding new upcoming soon to be implemented “pending” transactions procedures and ATM fees and policies. As a matter of fact at the time of this writing one of these “new” fees, the widely discussed and disputed $5.00 per month ATM fee has actually been rescinded by many.

Beware the dangers of hidden costs and financial pitfalls that may still be in place.

This is because on the heels of, or in conjunction (collusion?) with all these big bank Financial institutions announcements regarding bank fee and transaction processing changes, many workers in blue collar middle class homes across America, and even some who wear suits I would imagine, have been/are or will be soon, informed by their employers that the company they work for is/was/will be, changing over to a new direct deposit system. The increasingly familiar company name that is associated with the majority of this changeover in payroll activity across the nation is a Wall St. traded company primarily known as ADP ( they have a list of associates, affiliates and subsidiaries though that is pages long).

If your company has notified you that they will be changing your direct deposit servicer, as has recently occurred at my husband’s place of employment you will no doubt be asked to go online and “activate” this account. I caution all middle class blue collar employees prior to beginning this initial “activation” application process to read on, especially if you are lucky enough to have not yet done so.

Read the fine print; Do not just check “agree” or “continue” because you are directed to do so. If you do you may be approving additional liberties with the disbursement of your hard earned wages, as well as granting permissions to access and deduct funds from your checking account without approval or prior notification. It is possible that you may find that Monday or Tuesday has become your new Friday, and/or that your bank account is in distress and you are being charged additional fees and overdraft charges because of “pending” activity that occurred Friday – Monday afternoon, or there may have been unexpected additional payroll deductions that week that were not in your tight budget.

I had been busy in the weeks prior to the actual payroll company changeover, and we did not complete the online application prior to the transition. I do check bank activity pretty much daily though, like a fiend actually because I am a constant online surfer, so even though we had waited almost a month before going online to look at the application, I do know that payroll was never disrupted, the bank card, checks and auto payments continued to go through fine.

It was not until this past weekend, when I stumbled across a blog article about some woman panicking because she had 15 auto payments set up and her husband’s direct deposit paycheck was not being listed as available, or even pending ( that I actually remembered we were supposed to go online with the little brochure ADP had provided to all of the employees “to be sure they received all of the services offered that they had coming to them” .

Well, let me tell you from what I have learned since that day I would say this is quite the little trick ADP and the Big Bank Industry has pulled off here…Which quite ironically came to my attention on Halloween.

First off a brief google search revealed an excessive by any means number of consumer complaints regarding ISF transfers and pending funds not available chatter with many seeming to revolve around ADP and or direct payroll availability, pending funds issues, and in excess of available funds notices (on the day after payday).

Initial research on the company ADP shows an amazingly resounding across the board dissatisfaction with the services provided. Here are a few. By the way no surprise ADP Headquarters is Not Accredited Better Business Bureau, but they do have a lengthy list of complaints against them on site .

Individual employees as well as employers have been very outspoken about this company. In some cases small business were under seizure notice from the IRS due to problems originating with ADP mismanagement.

Even further research had me truly puzzled because not only is their complaint track record, from both the companies they service as well as the employees absolutely outrageous, ADP is also the most expensive company offering these services. Yet many employers appear to be rushing to engage their services. It turns out that ADP’s tentacles spread far, involving names on a list of different corporations and companies, affiliates and subsidiaries, partners providing services, products, and oversight, which is longer than my arm.

It was only upon discovering the extent to which they have saturated the industrial environment that this became a bit clearer. The time clock machines, the software and training programs, hiring services including temporary services and interviewing, it goes on and on, all to get in the door. They can then offer a package deal bundling services which include handling all of the company’s and their employees money. By the way, as far as I can determine the bundling still does not make them cheaper, so it is due to just plain laziness that companies accept and contract with them, because they provide so many services. (See attached list of “known” ADP Holdings) It makes ADP deceptively convenient.

This company, ADP handles not only direct deposit of payroll but details integral to human resource services, tax deductions , medical and dental insurance payments, 401k contributions, cobra, and if they make a mistake they access clients bank accounts, without notice or approval, to fix them. From Payroll and human resources to software and accounting and time clock machines into the real estate market and car industry, and yes, surprise, even into the oil industry. This company has thoroughly insinuated itself within our industry and saturated the fabric of blue collar economy.

After all I had learned, we sat down with the Direct Deposit Payroll plan information packet that was provided by ADP to my husband.

Since there were so many complaints about this particular company, when I did pull out the little brochure, which explained in baby steps how to complete their application, my guard was already up for any slick Monty online permission tricks.

I want to say that all of this information offered here is layman advice, my opinion only, and I am not an expert.

To begin we were forced to tell our computer to “allow” liberties it did not want to or would not normally have granted to proceed from page to page.

You can walk through the steps they lay out in the brochure, complete with pictures of the screen and set up password and user name. They make a point of being very clear how to proceed. They lead you through these simple steps in great detail. At each point you are asked to click “continue” to proceed to the next step.

If you have an existing Direct Deposit payroll account the user name and password should be all that you are required to complete. The “account” we were being asked to “activate” for existing employees is just a transfer from the company end, and is already “active”.

We were then directed to the next page. No nice clear instructions. 1 line of blue print with bank name with asterisks next to it. A corresponding asterisks note said “all funds unless otherwise specified will go into the account with asterisks”.

The page had a warning at the top instructing very clearly

“Do Not leave this browser window until sure all required ADP services have been selected”.

and that

“Once closed you will not be able to return to this browser window”.

At the bottom was a box which said to the effect:

I agree and consent that ADP will deposit my payroll on Friday but it may not be available till Monday or Tuesday or next business day. ADP debits employers account on pay date, and it may take time to credit as direct deposit.

It also said

I agree to allow ADP to remove funds from my bank if there are any disputes or questions with my payroll after it has been deposited.

So in other words for any reason at any time, even if it means you will be overdrawn, ADP can dip in to your account to fix “their” mistake at your expense. This could be very costly for families on a tight budget.

For example if the medical was forgotten to be deducted, the payroll company may go in at a later date, after the fact, and take it back out of the individual’s account. Changes to IRS deductions or incorrect state tax estimates, 401k deductions and matches, etc…. are treated the same way. Read some of the complaints against this company. People being sued for hospital bills because their employer insurance was cancelled for non payment at the time they went in to the hospital. Bounced accounts because when it was discovered the insurance payments were missed for weeks, the amount was deducted from employees in a lump sum. Absolute insanity.

We Did Not Check The I Agree Box granting liberties to hold payroll longer or access our bank account, but Lo and behold the very first weekend after “activating online”, and for the very first time, we had issues accessing our funds.

I was doing grocery shopping on Saturday, and was told my check for $81.07 could not be ACH processed because I was “In Excess of Available Funds”. I was embarrassed in front of a large group of patrons while the manager was called over. The manager knows me very well, I have shopped at Hogansville’s Ingles Market for well over a decade now, and by overriding (basically agreeing to hold my check till Monday?) they took my check and I was able to complete my grocery shopping for the week transaction, but I was told IF I had been using the bank card he would Not have been able to over ride. Yes, very interesting developments in America.

This company, ADP handles direct deposit of payroll as well as details integral to human resource services, tax deductions , medical and dental insurance payments, 401k contributions, cobra, etc… ADP also owns, operates, and / or is affiliated with a diversified list of stock market traded companies from Payroll and human resources to software and accounting and time clock machines, payday loans, into the real estate and car industry, and yes even to oil. This company has thoroughly insinuated itself within our industry and our economy as one of those “too big to fail” entities.

I Did Not check the I Agree box, and plan to make a legal inquiry regarding this matter.

I am hoping this article brings some much needed attention to this matter, as well as down upon this ADP payroll services company before what I can only call another assault on middle class Americans proceeds too far.

Employer accounts are debited on check date> employee gets a check on Friday not good till Monday. So Payroll companies get to use your money for 3 out 7 days of the week, charge you payday loan fees to access it if you need to, and the banks make the fees for being nice enough to give you your money.

Eyes Wide Open.

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