MS 2022-09-J-Barry-September-21-2022-Countywide-Policy-Requiring-Direct-Deposit-of-Payroll September 21, 2022

Can a Mississippi county make all employees take their paychecks by direct deposit?

Short answer: No. A Mississippi county can offer direct deposit, and may pay an employee electronically once the employee agrees, but it cannot make direct deposit mandatory for all county employees. Mandatory direct deposit also runs into separate personnel systems run by certain elected officials under § 19-2-9(2).

Disclaimer: This is an official Mississippi Attorney General opinion. AG opinions are persuasive authority but not binding precedent. This summary is for informational purposes only and is not legal advice. Consult a licensed Mississippi attorney for advice on your specific situation.

Plain-English summary

Kemper County's board of supervisors wanted to set a countywide policy requiring all county employees to be paid by direct deposit. The county attorney asked the AG whether the board had that authority.

The AG: no.

Mississippi law lets counties pay claims, including payroll, electronically. The Bryant (2001) opinion already confirmed that. The Uniform Electronic Transactions Act (Miss. Code Ann. §§ 75-12-1 et seq.) facilitates electronic transactions in government affairs. Section 7-7-211 lets the Department of Audit set systems and procedures for safe handling of electronic funds. And § 19-13-31(2) gives the chancery clerk authority to issue pay certificates for salaries on the board's order.

But there is one structural feature of the Act and the AG's prior opinions that prevents a forced direct-deposit policy. Both the Act (§ 75-12-9) and the AG's interpretation of the payroll statutes turn on consent: the Act applies "between parties each of which has agreed to conduct transactions by electronic means." The Clark (2007) opinion permitted electronic payroll "upon agreement of the payee." The Lawrence (2014) opinion stated it bluntly: "A municipality may not force its employees to be compensated via electronic deposit." That logic applies just as cleanly to counties.

The opinion adds a second wrinkle. Under § 19-2-9, county elected officials authorized to hire their own employees (sheriff, chancery clerk, circuit clerk, tax assessor, tax collector) can adopt independent personnel systems. The Haygood (2012) opinion said that when elected officials adopt their own system, the board's countywide system "has absolutely no application" to those employees. Method of payroll delivery, the opinion concludes, is part of personnel administration. So even if the board wanted to mandate direct deposit, it could not reach the employees of an elected official who has adopted a separate personnel system.

The brief response is therefore narrow: the board cannot require all county employees to sign up for and be paid by direct deposit.

What this means for you

If you serve on a county board of supervisors

You can adopt a direct-deposit option and encourage employees to enroll. You can make it the default for new hires, with a written opt-out form. You cannot make it the only way to receive a paycheck. Build the payroll system to retain a check or pay-card path for employees who do not consent.

If you have department heads who are elected officials with separate personnel systems, your countywide policy does not bind their employees. Coordinate with each elected official rather than legislating a single rule.

If you are a county elected official with your own personnel system

You set policy for your own employees on personnel matters, including the method of payroll delivery. If you want direct deposit for your office, adopt it as part of your office's personnel system and file it with the board. If you want consent-based direct deposit, mirror what the AG endorses for the board: offer it, document acceptance, retain a non-electronic option.

If you are a county employee without a bank account

You cannot be forced to open one as a condition of being paid. If your department adopts mandatory direct deposit, the AG's read of the law gives you grounds to ask for an alternative payment method. Pay cards (issued by the county, loaded electronically) are commonly used as an alternative for employees without traditional accounts, and they qualify as electronic transfer with consent.

If you are a county payroll clerk

When onboarding new hires or rolling out a direct-deposit option, document the consent in writing. The AG's opinions distinguish between an unconsented mandatory program (not allowed) and a consented program (allowed). The paperwork in the file is what makes the difference.

If you are a county attorney

The opinion gives you a clean framework for advising the board. Consent-based direct deposit, yes. Mandatory direct deposit for all county employees, no. Mandatory direct deposit for elected-official employees, definitely not, because § 19-2-9(2) takes those employees outside the board's reach in the first place.

Common questions

Q: Can a county pay claims other than payroll by electronic transfer?
A: Yes. The Bryant (2001) opinion was specifically about insurance payments and other claims paid electronically. § 75-12-1 et seq. and § 7-7-211 together support electronic payment of claims generally, subject to the Department of Audit's systems and procedures.

Q: Can the chancery clerk issue payroll without prior board approval each cycle?
A: § 19-13-31(2) lets the board, by order spread on its minutes, authorize the chancery clerk to issue pay certificates for salaries without prior approval each cycle, provided salary amounts have been set by the board's prior order or by the current fiscal year budget. That is a different question from whether direct deposit can be required.

Q: Why does the Uniform Electronic Transactions Act matter here?
A: § 75-12-9 sets the scope of the Act: it applies to transactions between parties who have agreed to conduct transactions electronically. That consent requirement is one of the Act's core features. Mandatory direct deposit, by definition, removes consent. The AG's reading is that the Act does not authorize the county to override consent.

Q: Does this rule bar the county from offering pay cards?
A: No. A pay card is still electronic transfer to an account, and it requires the same consent. Many counties offer pay cards specifically to give unbanked employees a way to opt into electronic payroll without opening a bank account. Just document the consent.

Q: Does federal law affect any of this?
A: The opinion expressly declines to address federal law. AG opinions in Mississippi are limited to state law. Federal Regulation E governs electronic fund transfers and limits the conditions an employer can attach to a designated account, which complements Mississippi's consent rule.

Q: What happens if the board adopts a mandatory policy anyway?
A: An employee whose paycheck is conditioned on consenting to direct deposit could challenge the policy. The AG's opinion is persuasive authority that a court would likely find the policy outside the board's authority. The county also faces an internal-control problem: the chancery clerk's pay-certificate authority under § 19-13-31(2) is structured around the board's approved salaries, not delivery method, and an unlawful policy creates exposure on the official bond.

Background and statutory framework

Mississippi splits payroll authority across several actors. § 19-13-29 puts the chancery clerk in charge of preparing and maintaining the claims docket for board approval. § 19-13-31(1) puts the board in charge of allowing claims at each regular meeting. § 19-13-31(2) carves out a streamlined process for monthly salaries: the board can authorize the chancery clerk to issue pay certificates without prior board approval, as long as salaries are already set on the minutes or in the budget.

The Uniform Electronic Transactions Act (§§ 75-12-1 et seq.) overlays a state-policy preference for electronic transactions, but conditions that preference on agreement of the parties (§ 75-12-9). § 7-7-211 lets the Department of Audit develop systems and procedures for safe handling of electronic funds.

§ 19-2-9 separately addresses personnel administration in counties operating on a countywide road system. § 19-2-9(1) requires the board to adopt a countywide personnel system. § 19-2-9(2) lets elected officials hire their own employees and either adopt the board's system or maintain their own. Per the Haygood opinion, when an elected official adopts their own system, the board's countywide system has no reach into that office. The Barry opinion adds that "method of payroll delivery is also within the purview of personnel administration."

Citations

Miss. Code Ann. § 7-5-25 (AG opinion authority limited to prospective state law questions)
Miss. Code Ann. § 19-13-29 (chancery clerk maintains claims docket)
Miss. Code Ann. § 19-13-31(1) (board approval of claims)
Miss. Code Ann. § 19-13-31(2) (streamlined pay certificate authority for salaries)
Miss. Code Ann. § 75-12-1 et seq. (Uniform Electronic Transactions Act)
Miss. Code Ann. § 75-12-3 (definitions, including "person" to include governmental agencies)
Miss. Code Ann. § 75-12-9 (Act applies between parties who have agreed to electronic transactions)
Miss. Code Ann. § 75-12-11 (scope of Act for governmental affairs)
Miss. Code Ann. § 7-7-211 (Department of Audit electronic-funds procedures)
Miss. Code Ann. § 19-2-3 (countywide road administration)
Miss. Code Ann. § 19-2-9(1) (board adoption of countywide personnel system)
Miss. Code Ann. § 19-2-9(2) (elected officials' separate personnel systems)
MS AG Op., Brock (Nov. 8, 2019) (AG declines to opine on prior actions)
MS AG Op., Berry (Feb. 10, 2014) (AG does not opine on federal law)
MS AG Op., Bryant (Aug. 10, 2001) (electronic payment of claims)
MS AG Op., Clark (June 8, 2007) (electronic payroll on agreement of payee)
MS AG Op., Lawrence (Jan. 17, 2014) (no forced electronic deposit)
MS AG Op., Haygood (May 1, 2012) (independent elected-official personnel systems)
MS AG Op., Abraham (Apr. 18, 2012) (personnel administration scope)

Source

Original opinion text

September 21, 2022
J. Richard Barry, Esq.
Attorney, Kemper County Board of Supervisors
505 Constitution Avenue
Meridian, Mississippi 39301
Re:

Countywide Policy Requiring Direct Deposit of Payroll

Dear Mr. Barry:
The Office of the Attorney General has received your request for an official opinion.
Question Presented
Can the Kemper County Board of Supervisors adopt a policy requiring all employees to sign up
and be paid by direct deposit for their payroll at a banking facility of the employee's choosing?
Brief Response
No. The Kemper County Board of Supervisors cannot require all county employees to accept
payroll payments via direct deposit.
Applicable Law and Discussion
Opinions of this office are limited to prospective questions of state law. Miss. Code Ann. § 7-5-25. To the extent your request deals with previously enacted Board policies, we must decline to
respond with an official opinion. MS AG Op., Brock at 1 (Nov. 8, 2019). Additionally, we cannot
opine or comment on federal employment policies, which you mention in your request. MS AG
Op., Berry at 1 (Feb. 10, 2014) ("Our office does not opine on federal law issues or questions of
fact, and we restrict our opinions to questions of state law.") We offer the following for prospective
purposes only.
For payroll as well as other claims, the chancery clerk of each county prepares and maintains the
claims docket for the board of supervisors' approval. Miss. Code Ann. § 19-13-29. The claims
docket shall be called at each regular meeting of the board with all proper claims being allowed.

Miss. Code Ann. § 19-13-31(1). However, for monthly salaries of county employees, the following
procedure may be followed:
Notwithstanding the provisions of this section to the contrary, the chancery clerk
may be authorized by an order of the board of supervisors entered upon its minutes,
to issue pay certificates against the legal and proper fund for the salaries of officials
and employees of the county or any department, office or official thereof without
prior approval by the board of supervisors as required by this section for other
claims, provided the amount of the salary has been previously entered upon the
minutes by an order of the board of supervisors, or by inclusion in the current fiscal
year budget and provided the payment thereof is otherwise in conformity with law
and is the proper amount of a salaried employee and for hourly employees for the
number of hours worked at the hourly rate approved on the minutes.
Id. at (2). Section 19-1-31 does not speak to payment by electronic transfer. However, this office
has previously opined that the governing authorities of several public entities, including counties,
could make electronic transfers for insurance payments and payroll-related insurance coverage as
well as claims in general. MS AG Op., Bryant at 1 (Aug. 10, 2001). "[E]lectronic transfers may
be used for payment of claims in general, subject to systems and procedures established . . .
pursuant to Miss. Code Ann. Section 7-7-211 to ensure safe handling of the funds." Bryant at 1.
The Bryant opinion cited several sections of 2001 Miss. Laws Ch. 400 (S.B. 2678), now codified
as the "Uniform Electronic Transactions Act," in explaining why payment of claims may be made
electronically. Miss. Code Ann. §§ 75-12-1 et seq. The Uniform Electronic Transactions Act
"facilitates electronic transactions consistent with other applicable law" "between two or more
persons relating to the conduct of business, commercial, or governmental affairs." Miss. Code
Ann. §§ 75-12-11 and 75-12-3. "Persons" is defined to include an individual as well as a
governmental agency. Id. at § 75-12-3. The Act applies to ". . . transactions between parties each
of which has agreed to conduct transactions by electronic means." Id. at § 75-12-9.
While payment by electronic transfer is acceptable, Sections 19-13-29 and 19-13-31 do not
authorize the chancery clerk or board of supervisors to require county employees to accept the
payment of their salaries by electronic transfer or direct deposit.
Consequently, following the Bryant opinion, this office further opined that "a municipality, upon
agreement of the payee, may make payroll payments to its employees . . . by electronic transfer,
subject to systems and procedures established by the Department of Audit pursuant to Section 7-7-211." MS AG Op., Clark at 1 (June 8, 2007) (emphasis added). Therefore, while a municipality
has the authority to pay employees through direct deposit, "[a] municipality may not force its
employees to be compensated via electronic deposit." MS AG Op., Lawrence at 1 (Jan. 17, 2014).
Counties, therefore, like municipalities, may make payroll payments to its employees via direct
deposit but only when an employee has agreed to such.
Additionally, county elected officials have the option to adopt their own policies of personnel
administration. Section 19-2-9(1) states:

The board of supervisors of each county which is required to operate on a
countywide system of road administration as described in Section 19-2-3 shall
adopt and maintain a system of countywide personnel administration for all county
employees other than those employees subject to subsection (2) of this section.
Section 19-2-9(2) requires elected officials who are authorized to hire their own employees to
either "adopt and maintain a system of personnel administration for their respective employees or
adopt the system of personnel administration adopted by the board of supervisors." Id. If the
elected officials decide to adopt their own personnel system, it must be filed with the county board
of supervisors. Id. This office has previously opined:
Although any such system [of personnel administration adopted by an elected
official] must be filed with the clerk of the board of supervisors, it is entirely
independent of any policy adopted and implemented by the board of supervisors.
Stated differently, the countywide personnel system and policy implemented by the
board of supervisors has absolutely no application to employees of the offices of
those various elected officials described by Section 19-2-9(2) unless the elected
official in question chooses not to adopt and implement an independent system.
MS AG Op., Haygood at 4 (May 1, 2012) (citation omitted). Personnel administration "is
essentially human resource management, and includes matters such as hiring, firing, compensation
and work hours." MS AG Op., Abraham at 2 (Apr. 18, 2012) (emphasis added). When the payroll
warrants being issued are for an elected official's employees, "it is those elected officials who are
responsible, and liable on their bonds, to make such assurances" that payroll amounts are valid. Id.
at *2.
It is the opinion of this office that the method of payroll delivery is also within the purview of
personnel administration.
Therefore, for the foregoing reasons, the Board may not require all county employees to sign up
and be paid by direct deposit for their payroll.
If this office may be of any further assistance to you, please do not hesitate to contact us.
Sincerely,
LYNN FITCH, ATTORNEY GENERAL
By:

/s/ Misty Monroe
Misty Monroe
Assistant Attorney General