Paychex ceasing direct deposits, other services to cannabis firms

U.S. marijuana companies are scrambling to find a new payroll provider after receiving a memo from Paychex Inc. advising that the company will no longer process direct deposits or offer other services for cannabis-related businesses.

A March 29 memo obtained by MJBizDaily warns that effective May 1, New York-based Paychex will no longer process direct deposit payments.

“Cannabis-related businesses (CRBs) continue to face significant banking obstacles because major banks will not allow electronic fund transfers from CRBs over their networks – typically because of differing state and federal regulations around cannabis,” reads the memo from Paychex, which provides payroll and human resource products and services.

“Paychex has worked diligently to provide as many of our services as we can within the parameters established by our banking partners. Unfortunately, we can no longer provide you with some of the services you are currently receiving from Paychex.”

The services Paychex are suspending include:

• Automatic payroll tax administration.
• Direct deposit.
• Time and attendance services.

Instead of electronic or automated services, Paychex is offering manual services to clients such as signature-ready checks or net-pay amounts for clients to write checks themselves.

To pay the company for its services, clients will have to pay by check.

Paychex did not respond to a request from MJBizDaily for more information about why it had taken such steps.

Cannabis operators posted on LinkedIn looking for alternatives.

Some suggestions include Paragon, KayaPush, Comploy, Panacea Payroll and Wurk.

Source: https://mjbizdaily.com/paychex-ceasing-direct-deposits-other-services-to-cannabis-firms/