340 [7 9 O p . A tt ’y LA BOR L AW M AN DA TORY D I RECT D E POS I T OF W AGES I MP E RMI SSI BLE U NDER M ARYL AN D W AGE P AY MEN T AN D C OL L E CT I ON L AW

February18, 1994
The H onor abl e Je an W

. R oes s er H ous e of D el egat es Y o u have r eques t ed ouropi ni on conce r ni ng t he l egal i t yof a pr i v a t e e mpl o y e r ’ s ma n d a t o r yd i r e c td e p o s i tp r o g r a m f o rt he p a y m e n t o f

w a g e s . For t he r eas ons s t at ed bel ow , w e conc l ude thats uch a ma n d a t o r yd i r e c td e p o s i tp r o g r a m wo u l d v i o l a t e M a r y l a n d l a w. An empl oy erm ay en coura ge empl oy ees t o agr ee t o di r ectdepos i tbut m aynotm andat e the us e of di r ectdepos it as a condi t i on of e m p lo y m e n t.

I A n a ly sis T he M ary l and W age Paym entand C ol l ect i on L aw , T i t l e 3, Subt i t l e 5 of the Laborand E m pl oy m ent( “LE ”) A r t i cl e, M ary l and C ode, w as enac t ed byC hapt er686 of t he L aw s of M ary l and 1966. O ne pr ovi s i on of t he l aw , fo r m erA r t i cl e 100, §94( b) of t he C ode, p ro v id e d a s f

o llo w s: “ P a y m e n t o f

w a g e s o r sa lar ies sh a ll b e in l aw ful m oneyof t h e U n ti ed St at es orchec k pay abl e atfac e val ue u p o n d em an d in la w f

u l m o n eyo f th e U n it ed S tat es.” T h e term “s hal l ” w as unm i s t akabl y m eantas a mandat e t o empl oy er s t o pay th e ire m p lo y e e s in c a s h o r b yc h e c k

. N o for m of di r ectdepos i tw as l aw ful undert he W age Paym ent a n d C o llec tio n L a w a s o rig in a lly e n a c ted . U n d e r a d ire c t d e p o sit pr ogr am, an empl o y ee r ece i ves nei t hercas h nora che ck. I ns t ead, t he empl oy ee r ece i ves a not i ce t hat a sum equal i ng t he w ages ow ed h a s b e e n d e p o s ite d in th e e m p lo y e e ’s b a n k a c c o u n t.G en. 340] 341

The “ cash or

chec k” re quirement wa s codified at the time at 1 former Article 100, §94(b)(3)

. The ter m “employer”means “ any person who employ s an 2 individual in the S tate or a succe ssor of the pe rson.” LE §3-501(b) . The term “person” is def

ined in LE §1-101(d)

. R e c o g n izin g th e strin g e n c yo f th e law , the G e n e ra l A ss e m b ly a m e n d e d it in C h a p ter 1 4 2 o f th e L a w s o f M a ry lan d 1 9 7 4 to c re a te t he fol l ow i ng exce pt i on t o t he “c as h orchec k” l i m i t at i on: “N ot hi ng cont ai ned i n t hi s s ect i on s hal l pr ohibit t he di r ectdepos i tof an empl oy ee’ s w ages or s al ary t o t he empl oy ee’ s per s onal bank ac count w hen s o author i zed by t he em pl oy ee. ” T he exc ept i on w as codi fi ed atfor m erA r t i cl e 100, §94( b) ( 4)

. A s of 1974, t her efor e, an 1 e m p lo y e r h a d th re e o p tio n s: c a sh ; ch e c k ; o r dire c t d e p o sit, b u t o n ly
“ w h e n so a u th o riz e d b yth e e m p lo y e e .” T h e e v id e n t in ten t w a s to a llo w e m p lo ye e s w h o f o u n d d ire c t d e p o sit m o re c o n v e n ien t to a ccept that form of p ay m ent fr om t he em ploy er. T here i s no b a sis fort he inf

ere nce thatt he G ener al A s s embl ym eantt o s ubj ect empl oy ees w ho di d not w ant di r ect depos i t t o be com pel l ed t o acc ept i tnonethel es s . A n empl oy er ’ s or der t hat an empl oy ee agr ee t o di r ect dep o si ti s notatal l t he ki nd of empl oy ee a ut hor i zat i on t hatt he s ta tu te c o n te m p la te d

. T he l aw t odayr emai ns es s ent i al l yas i tw as aft ert he 1974 a m e n d m e n t. T h e g e n e ra l ru le is sta ted in L E § 3 -5 0 2 (c ):

E ach e m pl oy ers hal l paya w age: ( 1) i n U ni t ed St at es curr ency ; or (2 ) b ya c h e c k th a t, on d e m a n d , is con v ert i bl e atfac e val ue i nt o U ni t ed St at es c u r r e n c y. 2

T he s ol e exc ept i on is se touti n L E §3- 502( d) : “Thi s s ect i on does notpr ohi bi tdi r ectdepos i tof t h e w ag e of t he empl oy ee i nt o a per so n al bank accountof t he empl oy ee i n acc or dance w i t h an author i zat i on of t he empl oy ee. ” The R evi s or ’ s N ot e s t at es t hatt he s ect ion i s “new l anguage der i ved wi thouts ubs t ant i ve c hange fr om fo rm er A rt
. 1 0 0 , § 9 4 (b).” (E m p h asis ad d ed

. )342 [7 9 O p . A tt ’y

In light of this conc lusion about St ate law , we ne ed not consider 3 whether mandatory

direc t deposit is permissibl e under federal law

. II C oncl usi on I n s um m ary , i t i s our opi ni on that t he M ary l and W age Paym ent an d C o ll e c tio n L aw au tho ri ze s an em p loy er to o ff er a v o lun tary di r ectdepos i tpr ogr am t o empl oy ees and t o encour age i t s us e, but does notal l ow an empl oy er t o r equi r e em pl oy ees t o par t i ci pat e i n a d i r e c td e p o s i tp r o g r a m. 3 J. Jo sep h C u rran , Jr. A t t or ney G ener al Ja c k S c h w a rtz C hi ef C ouns el O pi ni ons & Advi ce