Introduction
Direct Deposit is a payment method through which employees receive their paychecks electronically into their bank accounts, enabling them to receive their net pay directly without the need to deposit a physical check. This article will outline the process of setting up and managing direct deposit for your employees within Empeon Workforce, especially when there are multiple bank accounts that are set up. This article will also highlight how your employees can set up and manage their direct deposit information within their ESS Hub, should they be granted with the appropriate permissions to do so.
Setting Up & Managing Direct Deposit
When adding a new employee into Empeon Workforce, you'll be prompted to set up their direct deposit. If this isn't handled during the initial setup, the employee will automatically receive their paycheck in the form of a paper check. However, you have the ability add, update, or remove direct deposit information at any time.
To review or make changes to an employee's direct deposit information once they have been added to the system, navigate to the employee's profile: People tab > Employees > Select an employee.
From within the employee's profile, navigate to to their Direct Deposit information: Payroll > Direct Deposit. If there are bank accounts already set it, it will show here. If there are no accounts set up, there will be a grey button that says "+ Add Direct Deposit".
Additional information about the existing bank account can be reviewed by clicking the drop down arrow to the left of the account info card. To add a new account, click the blue "plus" icon in the top right corner of the Direct Deposit section
When you need to update an existing account, you will be prompted with two ways to do so. You can "Change" the record or you can "Edit" it. Clicking the Change button to update the record will effectively end date the current record and create a historical record within the system. Editing will simply overwrite the existing account information without recording a change history. If you need to stop/end an account, click the small blue calendar in the "Effective from" menu and key in the end date.
If you are adding a bank account for direct deposit, you will be prompted with the following fields:
- Effective Date - The system will automatically set the start date to the current date you are adding this account, however you have the ability to change the date accordingly by clicking the "Pencil" icon.
- Routing Number - If the system does not recognize a routing number that you feel is valid, please contact Empeon customer service for assistance.
- Account Number - This will need to be entered twice to ensure accuracy.
- Account Type - Specify whether the bank account is a checking or a savings account.
- Amount - Select the "$" icon for a fixed dollar amount to be deposited from every check or select the "%" icon to assign a percentage of each paycheck to be deposited. If this is the only account being set up, the amount should be set to a percentage of 100% so that the entire balance of the employee's paycheck is deposited into the account.
- Skip prenote - A prenote involves a zero-dollar test deposit in order to validate that the bank account is set up correctly. It takes approximately three days for Empeon to run a prenote after an account add or change. If payroll is run before the three-day period, a physical check will be provided to the employee.
- Deposit explicit amount - On records where a flat dollar amount is selected as the amount, this setting will appear to determine whether the system should only deposit an explicit amount into the account. If activated, the direct deposit will only deposit the flat dollar amount that was entered, if the employee's pay is equal or greater than that amount. If the amount is less than the amounted entered, no deposit to this account will be made.
Additionally, there is the option in the top left corner of this window to attach documents associated with this record. This can be helpful if you have a direct deposit bank form or a voided check on file that you would like to upload to this record.
Click the blue "Save" button once all fields have been entered.
Managing Multiple Direct Deposit Accounts
When there are multiple direct deposit accounts that are set up, the order in which they are prioritized is crucial. It is important to understand that the numbers assigned to each bank account, represent the order in which the funds will be deposited and then subjected to the remaining balance. This means that the bank assigned to number one, will receive the first portion of funds from the employee's paycheck followed by the second bank account, and so on.
In the example shown in the screenshot above, the first account will receive 15% of the employee's paycheck deposited into that account. The second account will then receive 25% of the remaining balance which is technically 25% of the remaining 85% that is left after the first deposit. The third account will then receive 100% of the remaining balance after the first two deposits.
One of the biggest misconceptions with multiple bank accounts set up to deposit based on percentages, is that each account must have the percentages that add up to equal 100. In reality, the percentages assigned to each bank account are being applied to the remaining balance as it goes from account to account.
In this next example, there is a combination of fixed dollar amounts and percentages.
The first account will receive a flat dollar amount of $125.00 taken from the employee's paycheck. After the $125.00 has been deposited, the second account will then receive 37.5% of the remaining balance and then the third account will then receive 100% of the remaining balance.
Please note: Percentage amount calculations are applied individually per account off the remaining net left over from accounts at a higher sequence. For any multiple account setups where the employee wants all their net direct deposited, there should always be only one account set to 100% and it should be the last account in the sequence.
As the employer maintaining this information for your employees, you will have the ability from this screen to order the bank accounts accordingly using the drag handler button shown on each bank account.
Allowing Employees to Manage their Direct Deposit in ESS
Employers have the option to allow their employees to change or add direct deposits themselves utilizing their ESS Hub. Workforce Admin users can setup this feature in the Company Request & Approvals. If this feature is activated, employees can update their direct deposit info by following the steps below.
Upon logging into their ESS Hub, employees can manage their direct deposit information within their profile: Profile > Pay > Edit.
After clicking the edit button, the employee has a very similar functionality to manage their direct deposit information as a Workforce User would. The employee can view and edit the amount contributions for each account, add or remove a direct deposit account, and set the priority order.
Depending on how you have this permission set up, the changes the employee makes can be sent to an assigned Role, the employee's manager or specific Users of Empeon Workforce for review and approval.