Funding payroll via wire
Fund payroll quickly and securely via wire transfers while managing associated risks.
Overview
Wire (aka FedWire) is a method of moving money from one bank account to another in the US. Wires settle same day and are irrevocable (meaning that once the money is sent, it can't be retrieved). Wires are convenient for funding payrolls as soon as possible, but they come with risk.
Benefits of funding payrolls by wire
Because wires settle faster than ACH, they can be used in scenarios where speed is necessary. Most commonly, they allow employers to:
- Fund payroll later: Payrolls can be funded via wire as late as 4:00pm ET on payday, and still have payments settle in employees’ bank accounts on the payday. If an employer misses the approval deadline to fund a payroll by ACH, they might want to fund the payroll by wire to ensure their employees still get paid on payday.
- Resolve failed funding: If an employer experiences a failed funding, Check encourages them to fund the payroll via wire. Check will reinstate the company to "good standing" as soon as the wire is received. However, if the employer instead resolves the failed funding via ACH, it takes at least three business days to return to good standing, which could delay the employer's next payroll. See Failed Funding Guide for more information about failed fundings.
Managing risk when funding payrolls by wire
Check's standard method of funding payrolls is via ACH debit. ACH debits take longer than wires, but because they are initiated by Check, there is less room for fraud (Check guarantees the funds will be sent to the correct bank account). Wires must be initiated by the Employer, which leaves room for error and fraud. Wires can be sent to the wrong recipient (either by accident or by fraud), in which case it can be challenging to get the funds back.
To reduce risk of wire fraud or error, Check recommends the following:
- Communicate wire instructions in your app: Direct users to retrieve wire details from your app using the wire details object. Don't communicate wire instructions via email, support tickets, phone, or text.
- Communicate risk of fraud to your customers: The best way to combat fraud is to encourage vigilance. Clarify to your users that you will never communicate wire details by phone, email, or text. If they receive wire instructions by any of these methods, they should alert your team immediately.
How to fund payrolls by wire
Payrolls can be funded by wire via API or Console.
API
In the API, this is accomplished by setting the funding_payment_method property on the payroll to wire. See the Payroll object for more information.
Console
- In Console, navigate to the draft payroll, select the “…” menu in the upper right, and select “Fund by wire”.
- Then, enter the intended payday, and check the box confirming that the employer intends to send a wire for the cash requirement amount for the payroll
- Click “Approve payroll and view wire details”.
- Provide the wire details to the employer to process the wire payment.
How to retry a failed payroll via wire
See “Retry debits” in Managing transactions.
Retrieving wire instructions
Note: Check strongly encourages partners to only communicate wire details in their app and never through phone, email, or text.
Console
- Navigate to the Transactions screen in Console and locate the employer debit.
- Open the actions menu and select "Wire details".
API
- Use the wire details object to display wire instructions in app. Note that wire details are not static and should be pulled for each transaction.
What to expect after the employer sends the wire
Note that Check does not initiate the wire transfer. The employer must communicate with their bank to wire funds to Check, using the unique wire details for their transaction. To ensure timely processing and reduce risk, wires must:
- Be for the exact amount specified
- Use the exact unique routing and bank account communicated by Check
If funds are wired to the wrong account, the employer could lose the full amount of their payroll. Employers should be reminded of the risks of wire transfers and encouraged to be vigilant for fraud.
Since Check does not initiate the wire transfer, Check needs to wait for the incoming funds and then reconcile them against the correct payroll. Depending on when the Employer communicates with their bank, this could take several hours. Funds must be received and reconciled by specific times to ensure timely payment of Employees:
- To ensure Employees are paid by 8:30am ET on payday: Wired funds must be received by 5pm ET the day before payday.
- To ensure Employees are paid by 6pm ET on payday: Wired funds must be received by 4pm ET on payday.
To reduce risk of paying Employees late, wires should be initiated 2-4 hours before the specified cutoff times.
Last updated on November 30, 2024