well that won't work too well anymore. Who actually gets physical paychecks anymore? Isn't it all direct deposit at this point?
My company won't do direct deposit because it costs extra money. I don't really understand why it costs more money to have dd though, it doesn't make any sense. Some how issuing physical checks to everyone, and having everyone physically cash those checks is all totally free, but dd would cost an extra fee for each person on the payroll. It's madness.
Much like a convenience fee for ACH payments instead of sending a check, it is a profit center for many payroll processing companies, as it's free float.
Say payday is the first day of the week. $250,000 of payroll for a generic company. Checks are handed over at the end of the day on 6/1. Payroll company pulls the month from the worker company on 5/29 to make sure the funds are available to pay the checks they issued. Some people cash their paychecks same day, and it clears on 6/2. Some of you are on vacation, out sick, etc. or just plain don't get around to doing it for a few days or even weeks. Say on average checks clear on 6/4.
Payroll company just got to invest $250,000 for 6 days and keep the interest. Invest it at around 1% APR and you just made $50. Repeat 52 weeks a year, $2,600 in extra profit in that one example company. ADP services over 600,000 companies. You can do the math and see this is potentially millions of dollars of free money. This is also why they love to mail checks -- if you can hold an average employee's $40k salary paid bi-weekly another 3 extra days as the USPS walks it to you every pay period and invest it at 1%, you just made an extra $85. If you can mail out checks for less than $3.25 you're coming out ahead versus letting them hand them out at the office.
If you turn the money over to every employee same day via DD, you don't get this free float.