Mandatory Direct Deposit Guide By State

According to the American Payroll Association's most recent "Getting Paid in America" survey, 95% of U.S. employees were paid through direct deposit. in 2023. Although it is by far the most popular payment method, some employees still prefer to get a conventional printed paycheck.

Is it possible to make direct deposit a requirement for your employees? That depends. It all relies on your state's employment law and employee categorization, as it does with most things in HR.

We've put together a table to assist your business in keeping track of mandated direct deposit laws no matter where you are:

	Can You Make it Mandatory?	Covered Employers
Alabama	Private Sector: Yes / Public Sector: No	All Employers
Alaska	No	All Employers
Arizona	Yes	All Employers
Arkansas	No	Private and State-Government Employers
California	No	All Employers
Colorado	No	Private Employers
Connecticut	No	All Employers
Delaware	No	Private Employers
District of Columbia	No	Private Employers and Local Governments
Florida	No	All Employers
Georgia	No	All employers except those in the farming, sawmill, and turpentine industries .
Hawaii	No	All Employers
Idaho	No	All Employers
Illinois	No	All private employers and local governments, but not state and federal governments.
Indiana	Yes	All Employers
Iowa	Yes: Employers may not require employees hired before July 1, 2005, to participate in direct deposit. Employers may require a new employee to sign up for a direct deposit as a condition of hire unless the cost to the employee of establishing and maintaining an account would effectively reduce the employee’s wages to a level below the minimum wage.	All Employers
Kansas	No	All Employers
Kentucky	Yes	All Employers
Louisiana	Yes	Public Sector or State Government
Maine	Yes	All Employers
Maryland	No	All employers under various statutes
Massachusetts	Yes	All Employers
Michigan	Yes	All Employers
Minnesota	Private Sector: No / Public Sector: The Commissioner of Labor & Industry may require direct deposit for all state employees	All employers under various statutes
Mississippi	No regulations regarding direct deposit	All Employers
Missouri	No regulations regarding direct deposit	All Employers
Montana	No	All Employers
Nebraska	No regulations regarding direct deposit	All Employers
Nevada	No	All Employers
New Hampshire	No	All Employers
New Mexico	No	All employers except employers of domestic labor in private homes and employers of livestock and agricultural labor
New York	No	All Employers
North Carolina	Yes	All Employers
North Dakota	Yes	All Employers
Ohio	No regulations regarding direct deposit	All Employers
Oklahoma	Private sector: Yes / State government: Yes	All employers under different circumstances.
Oregon	No	All Employers
Pennsylvania	No regulations regarding mandatory direct deposit	All Employers
Rhode Island	No	All Employers
South Carolina	No	All Employers
South Dakota	Yes	All Employers
Tennessee	Yes	Private employers with at least 5 employees
Texas	Yes	All Employers
Utah	Yes	Private employers except those involved in farm, dairy, agricultural, viticulturally, or horticultural pursuits; stock or poultry raising; household domestic service; or other employment in which a written agreement provides different terms.
Vermont	No	All Employers
Virginia	No	All Employers
Washington	Yes	All Employers
West Virginia	State institutions of higher education: Yes / Employers subject to the WPCA: No	Employers under certain circumstances
Wisconsin	Yes	All Employers
Wyoming	No	All Employers