The Hidden Costs of Paper Paychecks in Agriculture

Did you know that industry-wide, farmers and workers are losing more than $1 billion dollars of wealth each year by using paper paychecks?

Agriculture and food processing are some of the last industries to move away from paying people with paper checks.  And paper paychecks come with lots of costs - some direct, others hidden and less obvious - that affect both growers and workers.  

Direct Costs

The cost of printing, distributing, mailing, canceling, and reissuing checks, can easily add up to more than $1.65 per check.  For a farm with 500 employees and weekly paydays, that can add to over $40K per year.  

You also pay fees of about $35.00 for canceling unclaimed or lost checks before you reissue them. And there are also the costs associated with dealing with check fraud and fraud insurance.
Industry-wide, the costs of paper paychecks add up to a whopping  $400 million per year.

Time is Money

Printing, distributing, and managing paper paychecks takes a lot of time - and time is money.

Payday

You spend time processing payroll and in addition, your team spends time distributing checks.

You may have to travel to different farms, some of which can be a couple of hours’ drive away from your office. 

Then, there’s the scenario where farmworkers are moved around and their paycheck is with the wrong crew. 

Do you chase the paycheck down, wait for the crew leader to bring it back, or cancel and re-issue the paycheck?  

Reconciling Accounts

Are you familiar with farmworkers stashing paychecks as a form of short-term savings? The logic is, that if you don’t cash it, you don’t spend it. 

However, this has an adverse effect on your accounting department.

Accounting has to spend time reconciling accounts every month, and numerous outstanding checks can make the process more difficult. 

We’ve heard of ag employers having outstanding payroll paychecks of upwards of $30K at a time!

Re-issuing Checks

If payroll paychecks are being used by some farmworkers as a form of short-term savings, that creates another problem. 

Checks have expiration dates. 

Paychecks may expire after 90 to 180 days, which means farmworkers can’t cash them after that point. 

They then call you for help. 

And now you have to spend time checking, canceling, reissuing the check, and either mailing the new paycheck or perhaps even driving that check to a farm.

Costs to Farmworkers

The cost of paper paychecks does not only affect employers.  Paper paychecks also cost farmworkers a lot of money. Typical check-cashing fees are about 1.5%.  If an average weekly paycheck in Washington is about $700, workers spend $10.50 just to get access to their money.

From their perspective, $10.50 is 45 minutes of work under the sun, 450 pounds of apples picked. 

Put another way, that’s 26+ hours that workers put in each year to pay check-cashing fees. 

Industry-wide, that’s $750 million in worker wages ending up in the hands of check-cashing companies. 

$1B in Costs

$400M from employers and $750M from workers equals more than $1 billion dollars of wealth that farmers and workers are losing each year. This doesn’t even cover time and indirect costs.  

Given how slim margins can be for growers and how hard it is to attract and retain labor in agriculture, keeping that wealth in the pockets of growers and workers is critical. 

In short, printing, distributing, and managing paper paychecks takes a lot of time... time that your team could put to much better use!

So What Can We Do About Paper Paychecks?

Growers who want to eliminate the costs of paper paychecks can move to direct deposit.  But since many workers are unbanked, this is rarely a complete solution. Some growers have tried payroll cards - but if they are not designed for agriculture, they can create problems like freezing account access pending worker identity verification or non-Spanish speaking cardholder support.

That’s where Ganaz comes in.

Ganaz simplifies people management in agriculture and food processing through a software platform that saves employers time, effort, and money. Our modules enable paperless onboarding, communication, payroll cards, training, analytics, and overall workforce retention.

The Ganaz Mastercard® Payroll Card

The Ganaz Mastercard payroll card has been specifically designed for agriculture and food processing and benefits both employers and workers. It can be used as a standalone service, or as part of our overall onboarding platform.

Benefits for employers:

• Save money, time, and resources needed to process and distribute paper paychecks to multiple locations.

• Eliminate costs from check fraud, postage for mailing checks, and replacement of lost/stolen paper checks.

• Direct deposit wages into employee paycard accounts.

• Dedicated in-house bilingual Customer Service for any Payroll Card related issues.

• Quickly scan, issue, and activate payroll cards to employees.

• Easy management with the Ganaz Platform and a dedicated support team.

• Save time on reconciliation.

Benefits for workers:

• User-friendly access to card balance and transactions via text message and WhatsApp.

• Multiple ways for workers to access cash without incurring costly fees.

• Financial education content via text message that shows them how to access cash for free, use their card at the store, and manage their money.

• Multilingual in-house customer service to help with any questions.

“The efficiency to have everybody on direct deposit or payroll cards is going to be wonderful. I can’t imagine how anybody else would still keep printing out checks.”

- Olivia Juarez, HR Manager, NWFM

Our Ganaz People Management Platform offers the agriculture industry a payroll card built for the realities of ag. Find out how you can also start saving time, effort, and money - book a discovery call with our team. 

The Ganaz Payroll Card is issued by Sutton Bank, member FDIC, pursuant to license by Mastercard. Mastercard and the circles design are registered trademarks of Mastercard International Incorporated.