Wages must be paid in cash, negotiable check, draft, or money order (IN Code Sec. 22-2-5-1). An employer may pay wages by direct deposit to a bank or other financial institution designated by the employee. The state labor department states that an employer may not pay wages less often than semimonthly or biweekly because an employee refuses to participate in the company’s direct deposit method of wage payments. If an employee refuses electronic transfer for payment of wages, the employer must utilize another method of wage payment, such as cash, check, draft, or money order.
The state labor department has also stated that it has no authority to take action if an employee is terminated because he or she refused to participate in an electronic transfer program. Employers should note, however, that it is possible that the exception to employment at will based on public policy would provide employees with a recourse in the event of such a termination.