How to Pay Employees Who Don’t Have a Bank Account

Your options, what each one involves, and how to think about the tradeoffs.

Not every employee has a bank account. According to the FDIC's most recent household survey, about 1 in 5 American households is unbanked or underbanked — and that share is higher in industries with large hourly and seasonal workforces like staffing, construction, and transportation.

If you're running payroll for one of those workforces, this isn't a rare edge case. It's a recurring operational question: what are your actual options, and what does each one involve?

Here's a breakdown.

Option 1: Paper checks

The default, and still the most common fallback for unbanked employees. Paper checks satisfy wage payment requirements in every state, require no employee consent or enrollment, and give employees a physical record of their pay.

They're not free, though. NACHA data puts the cost of issuing a paper check at $2–$4 per check, compared to roughly $0.40 for ACH direct deposit. For a company with 60 employees on paper checks at a bi-weekly cadence, that's potentially $6,000–$10,000 in direct processing costs per year before staff time for printing, distributing, and reissuing lost checks is factored in.

Fraud is the other consideration. A check contains account number, routing number, and an authorized signature — everything needed to commit fraud. The Financial Crimes Enforcement Network reported over 680,000 check fraud incidents in 2022 alone.

Option 2: Prepaid debit cards (paycards)

Paycards are prepaid debit cards funded directly from payroll. The employee gets immediate electronic access to their wages without needing a traditional bank account, and you get the operational simplicity of electronic pay.

The main consideration is regulatory: most states prohibit employers from requiring employees to accept a paycard as their sole payment method. You'll typically need to offer at least one alternative — usually a paper check or direct deposit — and employees must be able to opt out. Some states also have specific requirements around fee transparency and access to wages without a charge.

Learn more: consumerfinance.gov — payroll card rights

If your workforce spans multiple states, compliance overhead is real. It's worth reviewing applicable wage payment laws — or flagging it for counsel — before rolling out a paycard program.

Option 3: Digital wallets

Some employers explore platforms like PayPal or Venmo for wage payments, particularly for workers who are already familiar with them. In limited cases — certain gig arrangements, for example — these can work.

For most traditional employment situations, they fall short. Most digital wallet platforms lack the payroll documentation infrastructure employers need, don't produce proper pay stubs, and may create compliance complications around wage payment records. They're also not consistently available or adopted across all workforce demographics.

Worth knowing about, but not a reliable primary solution for most mid-sized employers.

The longer-term path: helping employees get banked

Paper checks and paycards both solve the same problem: getting money to employees who can't receive direct deposit. Neither solves the underlying situation.

For employers who want to reduce paper check volume over time — not just manage it — the more durable approach is making it easier for employees to access real banking. When employees have a bank account, direct deposit works, and the whole operational burden goes away.

The challenge historically has been that traditional banking isn't accessible to everyone. Minimum balance requirements, fees, and credit history barriers lock out a meaningful share of the workforce — particularly in the industries Greenshades serves.

For Greenshades customers, OnePay addresses this directly. It's built into the Green Employee self-service portal — the same place employees already view their pay stubs and W-2s. Employees see the option when they pull up their pay statement and can enroll in a few steps.

It's optional, requires no administrative setup, and doesn't replace paper checks for employees who aren't ready to switch. It just gives employees a path if they want one — at the moment they're most likely to want it.

For more on what that looks like in practice, the financial access webinar recap covers the full picture.

FAQ

Can I require my employees to accept direct deposit?

Most states allow employers to mandate direct deposit with written employee consent, and some require offering an opt-out option. A handful of states prohibit mandatory direct deposit entirely. Check the wage payment laws for each state where you have employees before implementing a requirement.

Can I require employees to use a paycard?

In most states, no. Employers are generally required to offer at least one alternative payment method alongside paycards, and mandatory enrollment is prohibited. State rules vary, so review applicable wage payment law — or consult counsel — before rolling out a paycard program.

What's the required fallback if an employee can't or won't accept any electronic payment method?

Paper checks are the universal fallback recognized under state wage payment laws. If an employee declines both direct deposit and a paycard, a paper check is the required alternative in most jurisdictions.

How do I figure out how many of my employees are on paper checks and why?

Start by pulling a report from your payroll system showing payment method by employee. Once you have the count, work with HR to understand the split: some employees may be on paper checks because they don't have a bank account, others because they never completed direct deposit enrollment, and others by preference. The answer shapes which solution makes sense.

Which industries tend to have the highest rates of unbanked employees?

According to FDIC data, unbanked and underbanked rates are significantly higher in industries with large hourly, seasonal, or shift-based workforces — including staffing, construction, transportation, hospitality, and light industrial.

Note: This information is for informational purposes only and does not constitute formal tax, legal, or compliance advice. Always consult with qualified tax advisors, legal counsel, and your organization's internal teams for guidance specific to your situation. Additional regulations may apply. For the most accurate and up-to-date information, refer to official government resources and regulatory agencies.