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Isn鈥檛 technology grand? Your friend picks up the coffee tab and, rather than fork over a 20-spot to cover the cost of your grande nonfat oat milk chai latte with two pumps of brown sugar syrup and extra vanilla sweet cream cold foam and caramel drizzle, you now simply whip out your smartphone, type a few characters into a peer-to-peer (P2P) payment app 鈥� utilizing a cute emoji to signify the purpose of the payment, of course 鈥� and you鈥檙e all square. These P2P apps have become more ubiquitous in everyday life, particularly following the COVID-19 pandemic when most establishments went cashless (and many consumers remain largely that way to this day). In fact, people have been known to unashamedly share their Venmo username seeking donations on signs during ESPN鈥檚 College GameDay show (though I am resisting putting mine into this article).

However, the rise in wage payments made via P2P pay applications, such as Zelle, Venmo, or CashApp, is starting to rear its head in employment issues. While these apps are quite handy for reimbursing your share of a dinner split among friends, they may be more troublesome for payroll purposes. Additionally, their use for paying employees may be fraught with heightened risk as compared to standard payroll processing programs or institutions.

Oregon statute (652.110(5) for those interested in that sort of thing) expressly provides that Oregon employers 鈥渕ay pay wages through an automated teller machine card, payroll card or other means of electronic transfer,鈥� provided the employee expressly agrees to such method of payment, and the employee can 鈥渕ake an initial withdrawal of the entire amount of net pay without cost to the employee; or choose to use another means of payment of wages that involves no cost to the employee.鈥� So, payments via these applications are seemingly valid so long as they do not cause the employee to incur fees and are voluntarily agreed to by them. However, other issues may arise for employers using these methods to pay wages.

Regardless of method of payment of wages, all Oregon employers still need to calculate the appropriate taxes and withholdings from each paycheck 鈥� and these P2P applications do not do so 鈥� as well as issue itemized wage statements. An employer may provide the required itemized statement in an electronic format, such as a PDF via email, only if the employee expressly agrees to receive the statement in such form. Oregon law requires employers to provide employees with a detailed itemized pay statement with each paycheck that discloses certain information, such as the date of payment, dates of work covered by the payment, pay rate, basis of pay, gross and net wages, itemized deductions, and regular and overtime hours worked with corresponding pay if applicable.

Proof of payment can sometimes be difficult as well for employers using a P2P application, as the recordkeeping for such payments on some of the apps is lacking or deficient for proving payments in court (which can be problematic if they are needed to combat a wage claim). It is imperative that employers establish that such payments are wages, and appropriate withholdings have been made from the wages, as detailed in the itemized statement that accompanies the payment. It is also important that employers clearly denote that the payment is an actual payroll payment, less applicable withholdings, as these apps are used for all sorts of other payments as well, so showing that the payment is payroll and not some other payment to the employee (personal loan, etc.) could be difficult if not clearly labeled.

Another issue can arise with respect to security and reversibility in case of error. Automated Clearing House (ACH) payments, the type typically used for paychecks issued via direct deposit, are secure, backed by consumer protection legislation, and can be traced and reversed. Conversely, P2P transfers are not protected and typically cannot be reversed by any third party.

A friend of mine has a typo in his Venmo username. He did not realize it before submitting the username and finalizing his account. If I type his name into Venmo to send him a payment, it will not go to him if spelled correctly (I must use the typo name). If money is accidentally sent to someone with a similar name as his (but spelled correctly), the likelihood of recovery of that money is small. However, with ACH transfers, incorrect or mistaken payments can be canceled or reversed under certain circumstances.

The method employers use to pay wages is crucial because violations of Oregon鈥檚 wage and hour law can carry draconian penalties that may far exceed the amounts of wages improperly paid. So, before you decide to utilize newer technology to pay wages, speak to a knowledgeable (and technologically savvy) employment attorney to ensure you maintain compliance with state and federal laws.

Sean Ray is a partner with Barran Liebman LLP. He advises and represents employers regarding a full range of labor and employment matters. Contact him at 503-276-2135 or [email protected].

The opinions, beliefs and viewpoints expressed in the preceding commentary are those of the author and do not necessarily reflect the opinions, beliefs and viewpoints of the Daily Journal of Commerce or its editors. Neither the author nor the 91视频 guarantees the accuracy or completeness of any information published herein.