A Positive Solution for Employers and the Immigrant Workforce

By: Craig Fuller
Date: 1/1/2007

Because of the increase in operational efficiencies and expense-reducing results, payroll cards have experienced steady growth and wide acceptance over the last few years in all segments of the U.S. workforce, including staffing and temporary services agencies that employ or offer job placement to immigrant and guest workers.

Overcoming History
For companies that utilize the enduring work ethic of immigrant workers, it is important to choose a payroll card program, that not only attains your goals as an employer, but is also culturally sensitive to the workforce you are managing. By giving employees a greater sense of control over their money and providing services that are tailored to their everyday needs, a "win-win" scenario is created for all involved.

Unfortunately, prior to coming to the U.S., many immigrants have experienced unpleasant circumstances with the unstable banking systems in their native countries; as a result, there may often be an inherent distrust of banks in general. This lack of trust can impede voluntary participation in a payroll card program that requires the employee to set up a bank account, which counteracts the employer's and staffing company's desire to experience the money-saving benefits associated with implementing a payroll card program.

Making the Right Choice
To achieve maximum results for both the employer and employees, payroll card programs that utilize a stored-value card, which is tied to a personal bank account, can offer higher rewards for both employer and employee. Making payroll deposits to a stored value card is equally secure and reliable, because the funds are routed in the same manner as other payroll deposits - via ACH direct deposit or bulk wire. Many immigrant workers prefer this method because the endresult is the same - getting access to their wages via a payroll card, but without the one-on-one banking relationship. For the employer, the process is equally desirable due to the advanced technology of today's stored-value cards. Employers and staffing companies can utilize their existing direct deposit functionality, i.e. ABA routing number and account number (card number) to route deposits through the Federal Reserve System. If you think of each card as a voided check, it's easy to understand the concept - except that the card is not tied to a personal checking account.

Tailoring Products and Services for Immigrant and Guest Workers
Generally speaking, there is one important thing that many immigrant workers have in common: most have a desire, or need, to send money to support family members in their native country. In Mexico alone, money remittances have increased 43 percent from 2001 to 2003, totaling 13.2 billion dollars annually. India has experienced steady growth in money remittances as well: from 2003 to 2004, 26 billion dollars were transferred from the U.S. to family members in India.

Why is this important to the staffing industry? For immigrant employees that currently receive paper checks, the tasks of either taking their check to a bank - with which they have no relationship - or, to a check cashing store, can be timeconsuming and expensive. Even after the paper check is cashed, and the employee has money in hand, there are the obvious downsides that come with carrying large sums of cash - loss and theft.

One of the more popular payroll card programs getting a lot of attention is a program whereby the employees can purchase another "spousal" or "companion" card directly from the card provider. These secondary-type cards are purchased by the employees and given to family members. These secondary cards are used to receive funds transferred to them from the employee's card, which can often be initiated using an automated telephone system or the card provider's Internet site, and best of all, transactions occur in real-time. Once the transfer has been made, the holder of the secondary card can immediately access the payroll funds transferred to them at a participating ATM.

All that said, payroll card programs with "companion" and "secondary" features are gaining popularity with employers and staffing companies that employ immigrant workers for reasons other than the streamlining of their internal payroll distribution process. Payroll cards are of great benefit because they allow employers to give their employees the safety and convenience of accessing payroll funds 24/7 through their card, plus they have the ability to complete low-cost money transfers to family members worldwide.

As the face of the U.S. workforce changes and becomes more diverse, it becomes evident that employers, and staffing companies alike, need to be aware that choosing the right payroll card provider can have very positive, long-lasting effects on their overall employee workforce, as well as on the improvement of their bottom line.

Sounds like a "win-win" situation to me.

Craig Fuller is the CEO of Innovative Processing Solutions. He can be contacted at 423.553.5203, or by email at cfuller@ipsolutionsusa.com.