Hi.

I have been cashing my payroll check at the bank which it is drawn on (where my employer banks, B of A) for several years now. I do not have an account there. I do this for convenience only, cashing my check on payday, rather than waiting until Saturday to go to my own bank. The other day, when cashing my check at my employer's bank (where check is drawn on), they told me starting July 1st they will charge me $5 each time I cash my check, since I do not have an account there. Is this allowed? My employer is in NY and NJ and the particular B of A branch in question is in NJ.

Our local B of A has been doing this for a few years now. I'm in Florida.

I am the original anon who posted...found this from June 2004...I wonder if other states have similar laws for employers...

Many California employers were surprised to learn recently that they could be open to legal action because of a law that requires them to ensure that their employees can cash their paychecks without being charged a fee. The issue intensifed when two businesses filed lawsuits against two banks that impose the fees.

Karis House, a nonprofit, has sued Bank of America, while Ability Answering-Paging Service has sued Wells Fargo.

They argue that banks are opening employers to liability under section 212 of the California Labor Code (in effect since 1911) by charging $5 fees for nonaccount holders to cash checks, even if those checks come from an account holder. For those working minimum wage jobs, the fee can be equivalent to an hour's work, according to California Sen. Dean Florez, D-Shafter, who introduced two bills to stop the practice. The bills were pending as of press time.

James King, an employee of Karis House, said he discovered the fees while intervening on his employees' behalf with Bank of America. An employee asked King for cash instead of the reimbursement check he was about to issue her because she'd been charged $5 previously to cash a $13 check. King said he didn't know about section 212 or protections for his employees from paying paycheck cashing fees when he contacted his bank to protest the charge.

Orig. Anon,
It is an interesting article and California has had this issue in the news with both sides arguing their side. Since you are dealing with a bank in NJ, you will need to determine the laws applicable to that state.

Some banking laws apply to banks in every state and some are state laws that only affect the banks in their state. To further complicate matters, some state laws have no impact on a National bank whose home office is in another state.

Perhaps a NJ banker will be able to shed additional light on your issue. As for MS, we can charge a non-customer check cashing fee -- some banks do and some do not.

Unfortunately, the rationalzation to collect a fee I believe is flawed. Banks are not cashing checks for non customes that are dawn on their bank. They are cashing them for their customers for which they do charge their customer fees to maintain their account. Those fees include a charge for processing debits to the customers account REGARDLES of how the checks are presented.

Now I know banks charging these fees will never agree to that thought process. IMO the boundaries of business morals and ethics are being pushed very hard by some banks. That eventually brings in the law makers to pass more laws for bankers to adhere to which just adds to the compliance officers burden.

Thanks for the feedback. I will have to see if similar laws in NJ and if they even apply to B of A. Next time I cash my check I will mention that they are cashing the check for their customer, whom they already charge maintenance fees, etc. I cannot wait to see their response. Thanks again.

Orig Anon, I would bet big bucks the b of a has already researched the law. I worked there for many years and they don't do anything without double checking first. If you have ANY account (no fee credit card) they will not charge you.

I doubt there is any law that prohibits the fee being charged. I also doubt you will have any sucess getting the fee waived. Frankly, as a non customer they don't care what rational you use, and the clerical staff you are talking to have no authority to change the banks policy.

Your best bet is to complain to your boss that his bank charges you to cash his payroll checks and that you want the $5.00 added to your check to cover the cost of collecting your wages. Enough people complaining to the boss may at least get him to talk to management at the bank. If his account relationship has any clout its possible the fee would be waived.

Either that, or if the boss has to go through his employees complainig every payday, he may decide to change banks to where the fee is not charged.

Thanks everyone for your responses.

You have two alternative courses of action, other than grousing to your employer. The first is to wait until Saturday and deposit the check into your account at your bank, where you won't be charged for the privilege. The second is to ask your employer if it offers direct deposit of payroll. Then you can have the check deposited in your bank account on Friday, and pull any needed cash for the weekend from an ATM.

My employer does not offer direct deposit, so I will have to wait until Saturday and go to my own bank. Cashing the check on Friday was a convenience, but I am not willing to pay $5 for that convenience.

some banks in Louisiana have previously charged customers to cash checks as well, I believe it was called a "teller service fee" and you were charged $5 each time you saw a teller. I think now that JPMChase has bought BankOne, it is no longer being done by anyone.

There is a new option. A few companies now offer payroll cards. They are similar to the visa gift cards, but you keep it and it gets "loaded" every payday. This is a way to pay employees without checking or savings accounts. It can be "spent down" or accessed through an ATM machine. Pretty neat idea. Anyway...for what it's worth.

Some states require employers to pay employees by a check or other device that can be converted to cash without a fee or "discount." If your state is one of these, you might convince your employer to get the fee waived or switch banks.

We charge a check cashing fee. It is not something i really agree with, but it is allowed. If they offer free checking you could open a second account with them to avoid the fee.

Here is the state website that may help you web page Look under section 34:11-4.2

Why not open a bank account at B/A?

Really what is the big deal? Why whine over paying a fee when you can easily avoid the fee?

The Bank is charging the fee to the non-customer not to its customer.

You are forgetting the fact that by cashing the check for the non-customer the bank is giving up the right to receive transfer warranties from the non-customer and his bank. Why should B/A essentially give up it warranty rights for nothing?

B/A does not give up those rights for nothing - they give it up in order to provide a service to their customer - that service being that they can write checks to customers that can cash them with little or no hassle - I call a fee a hassle, but don't get me wrong - we community banks love - can't tell you the number of customers we've received from B/A and their brethern that don't like their employees having to pay a fee to cash a check - on top of the service fees the business owner is already being assessed on the account.

Also, perphaps these folks bank elsewhere and happy with their FI - but an individual/business has written them hot checks, so they would like to avoid that, perhaps they want to stop and buy dinner for their family on the way home and deposit the rest on Saturday - If you had the time I could probably give you 1000 scenarios why someone wouldn't want to open an account at B/A, beside the obvious on - it's a free country -

So the charge only applies to company checks... like payroll checks? A check is a promissory note, one that the bank in offering checking accounts agrees to honor, if they charge people or refuse then aren't they putting their customers in the position of having committed fraud? If they won't honor the check or insist on charging a fee then the original signer of the check has essentially passed a bad check, no?

No the employer has not passed a bad check. The fee is a way to keep the lobby clear for their account holders. If you have ever been to a busy bank on a Friday you know what I mean.

It also helps keep the cash on hand less for the tellers. I think the idea resulted from customer complaints on wait time and potential theft.

Businesses do have the option of paying that fee for thier employees...if they wish.

"The fee is a way to keep the lobby clear for their account holders."

By all means lets keep those pesky potential customers out of our lobby.

I hear what you are saying. BUT it is always the same people and they never become customers.

Could it be because no one gets up out of a chair and asks them, or does anything to develop a positive relationship with them?

As a branch manager I used to walk over to non customers that I saw in the bank regulary on paydays and introduce myself. Tell them that I saw them come in regulary and that we had some excellent services and products to offer. I would mention low auto rates, or what ever, give them my card, and say if they ever need anything please contact me. The amount of NEW business developed by this simple process was teriffic.

Does anyone have any idea how much a bank spends in time and money developing a positive image that tries to get people in the door. So lets make sure when they do we really p*&% them off so they won't come back "EVER"

Obviously this has hit a sore spot with me and I don't mean to hijack this thread so I'll not post anymore about it. But Oh man would I like too.

I will say that I knew the non-customers as well as I knew the customers. That's the kinda gal I am. I am talking in more general terms in my earlier posts. It not as much of a problem in my branch, because we enjoyed the non's as much as the our customers.

I think the number of viewers and posters indicates that this is another 'hot topic' between the big bankers and the community bankers - I used to be with one of the big boys - (soon to be merged with Chase - you guess it) and I don't miss it a bit - as a Banking Center Manager I had zero customer service authority, couldn't even approve loans - that was done, centrally, elsewhere - I found myself to be a glorifed sales cheerleader. I love the Community Bank - actually getting to help customers. What an amazing feeling - even as the Training Director - was in one of our centers Saturday - that was very busy - new accounts, etc - so made coffee and visited with customers - they love it - I love it - Vive' La Community Banking!

At one time I worked at a branch that handled several large payroll accounts. We would have days when the line was so long it ended outside the building. My branch manager at the time decided to open customer priority windows. Customers would be directed to those windows, the non customer check cashers were segregated to other tellers. The manager and assistant manager would "work the line" of the non customers, verifing ID, approving the checks and trying to sell banking services. The had success turn the non-customers to customers. Then these new customers became great resource in bringing their non-customer co-workers over to open new accounts.

Bravo mountainmannj. Thats exactly what we did.
To further keep the lines down " all non teller" personnel patrolled the lines and asked for anyone that had straight deposits (No cash in volved) to step over to the platform where there deposit was accepted.

It takes absolutely no talent to find reasons to not do something.

I did basically what mountain mann is talking about...when I worked for BofA. The old BofA that is. (Sure we were still fee crazy, but not the way things are now).

Charging $5 to cash a check is a great way to cut into the low and moderate income worker's paycheck. It's "anti" CRA. The majority of folks who do need to come into the bank and cash those checks, account holders or not, are not your middle or high income folks, but instead, folks who work from paycheck to paycheck. You are always welcome to write their CRA officer as well as their examining agency and mention this in context with their CRA performance (the Community Reinvestment Act). Be sure to mention the detrimental effect this has on the low income residents of your communities. Ask them to keep a copy in their "public file". If enough letters build up, pressure can be put on the bank to stop the fee.

You could also ask the NCRC to write "with" you. http://www.ncrc.org/ They are a very powerful advocate for the working poor and frighten the huge banks beyond belief!

Since you are in NY/NJ you could also contact http://www.innercitypress.org/ with the same comment as above. They are another very active organizations.