Oketz Survey: Vast majority of employers exceed their overdraft limits on pay-day
Some 84 percent of employers exceed their overdraft limits on the day they pay out salaries, a survey by Oketz Systems has revealed. The survey also revealed that two-thirds of employers exceed their bank-approved limits at least twice a month.
Oketz conducted the survey ahead of Supervisor of Banks Yoav Lehman's new directive no longer permitting bank customers to exceed credit limits starting January 1. Numerous banks, particularly those whose payrolls comprise a significant chunk of their expenses, won't be able to transfer salaries to their workers on time because of this directive, according to Oketz co-CEO Ami Bergman. Oketz develops technology systems for managing and calculating salaries among 628 small and medium-sized business.
"Many employers included in the survey are profitable and stable, yet they exceed their credit limits for a few days during the pay day period," Bergman noted. "A few days later, they deposit funds and return to within their permitted overdraft limits," he added. Failure to pay salaries will have a domino effect, with employees not receiving their salaries on time and then being unable to make various payments. Bergman said. "As a result, the Finance Ministry and the banks will have to find a creative solution that allows overdraft-limit violations for the purpose of paying out salaries," he concluded.
Ze'ev Weiner, president of the Lahav umbrella organization for independent businesses, warned this weekend that enforcing overdraft limits would exacerbate the situation of small and medium-sized businesses, some of whom won't survive.