Credit policies
Define credit policy tiers, processing rules, and risk‑sharing for payroll funding.
Overview
Check's credit policies govern how Employers can run payroll on the platform and what happens when an Employer's payroll funding fails.
To balance Employer convenience with sustainable credit risk, these policies cover three areas:
- How close to payday Employers can approve payroll. Accelerated processing lets an Employer approve payroll two business days or less before payday; standard processing requires three or more. Shorter approval windows are more convenient for Employers but carry credit risk because funds may not clear before disbursements are made.
- What happens after a failed funding. A failed funding occurs when Check's ACH debit from the Employer's bank account is returned. Consequences scale with the failure mode and how many times it has happened, ranging from a temporary waiting period, to permanent downgrade to standard processing, up to termination from the platform.
- Who is eligible for accelerated processing in the first place. New Employers without payroll history (Inception Companies) and Employers with a history of funding failures are restricted. Established Employers with a clean track record can run accelerated.
These policies are applied in two tiers at the Partner level — Standard Risk Tier and Low Risk Tier — based on the risk profile of the Partner's user base. The Low Risk Tier offers more lenient treatment and is contingent on maintained low loss rates. Partners who want to override Check's credit decisions for specific accounts can use Check's risk-sharing feature, which lets the Partner accept credit risk on those accounts in exchange for the ability to upgrade them.
The rest of this article defines the specific terms used and lays out how each policy differs by tier.
Definitions
Term | Definition |
Accelerated processing | Payrolls where the approval deadline day is two business days prior to payday or less. |
Standard processing | Payrolls where the approval deadline day is three business days prior to payday or more. |
Failed funding | Occurs when Check processes an ACH debit from an Employer bank account to fund payroll and the ACH debit returns (i.e., fails). |
Non-sufficient funds (NSF) | A failed funding that returns with an ACH return code "R01" (non-sufficient funds), indicating the bank account did not have sufficient funds to fulfill the debit. |
Failed funding strike | Each payroll with one or more failed fundings counts as a single "strike" toward termination. Multiple failed fundings on the same payroll count as one strike. Strikes can occur on accelerated or standard processing payrolls. |
Waiting period | A period during which an Employer cannot approve accelerated processing payrolls because they have an outstanding failed funding strike on their record. A strike is removed after the Employer waits 90 calendar days and successfully funds 10 consecutive payrolls. Once the strike is cleared, the Employer is re-graduated to accelerated processing, provided they were previously approved for it. Re-graduation is only available to Employers with a single strike — Employers who accrue two or more strikes remain on standard processing permanently. All payroll types count toward the 10-payroll requirement, including off-cycle payrolls. Waiting period details are visible in Console by hovering over the Company's processing period. |
Inception Company | A Company with no prior payroll history. |
Switcher Company | A Company with payroll history. |
Risk assessment | Check performs a risk assessment of all new Employers that join the platform. The assessment considers publicly-available data about the Employer's history and determines whether the Employer has an acceptable risk profile to run accelerated processing payrolls. |
Risk tiers
Check sets credit policy in tiers at the Partner level, depending on the risk profile of the Partner's user base. Partners are assigned to one of two tiers:
- Low Risk Tier
- Standard Risk Tier
To confirm tier assignment, contact your account manager.
Note: Qualification for the Low Risk Tier is contingent on maintaining minimal or no losses. If a Low Risk Tier Partner experiences fraud, significant credit losses, or other material risk events, Check may change that account's risk tier at any time, at our sole discretion.
Onboarding & eligibility for accelerated processing
These policies determine when and how a new or existing Employer can run accelerated processing payrolls.
Risk assessment for onboarding Companies
Standard Risk Tier: Check reviews litigation, tax-lien, and UCC-lien history.
Low Risk Tier: Check reviews tax-lien history only.
Inception Company waiting period
Inception Companies start on standard processing. If the Inception Company passes Check's risk assessment, they are automatically upgraded to accelerated processing after a waiting period. If the Inception Company does not pass Check's risk assessment, they remain on standard processing permanently.
Common ownership upgrades
If an Inception Company can prove common ownership with another Company on Check's platform, that Inception Company can upgrade to accelerated processing immediately, provided the following conditions are met:
- The Inception Company must pass Check's risk assessment.
- The Inception Company can submit proof (via Zendesk ticket) of common ownership with another Company on Check.
- The other Company must have:
- Successfully funded 10 payrolls
- Been running payroll on Check for more than 90 calendar days
- No funding failures for non-sufficient funds
This policy also applies to Companies migrating from one Check Partner to another. In that case, Check considers the Company on the new Partner to be the Inception Company and the Company on the original Partner to be the "other" Company. The Company on the new Partner can upgrade to accelerated processing as long as the conditions above are met.
Year-start switchers
To accelerate onboarding at year start, Companies with January start dates are not required to upload historical payrolls to be considered Switcher Companies. To get accelerated processing, the Company must:
- Pass Check's risk assessment
- Have a Check start date in January
- Self-report a previous payroll provider (recorded in the
previous_payroll_providerfield in the Enrollment Profile)
Failed fundings
These policies define what happens when an Employer's debit fails — both for payroll debits and for other Check-initiated debits.
Waiting periods and downgrades
Standard Risk Tier: If a failed funding due to non-sufficient funds (NSF) occurs, the Employer is immediately placed on a waiting period. After any second failed funding, the Employer is moved to standard processing permanently.
If the first failed funding is due to any other reason besides NSF, the Employer has 5 business days to resolve it. If it is not resolved in time, the Employer is placed on a waiting period.
Low Risk Tier: The Employer has 5 business days to resolve the failed funding. If they resolve within 5 business days, they remain on accelerated processing. If they do not, they are placed on a waiting period.
Effect on concurrent payrolls
Standard Risk Tier: If a Company runs multiple, concurrent payrolls and one payroll has a failed funding, other payrolls stop processing until the failed funding is resolved. This means employee credits on other payrolls (even if those payrolls are successfully funded) may be delayed until the failed-funding payroll is resolved. New payrolls cannot be approved until the failed funding is resolved. For more information, see Failed Funding Guide .
Low Risk Tier: If a Company runs multiple, concurrent payrolls and one payroll has a failed funding, other payrolls continue processing as usual. New payrolls still cannot be approved until the failed funding is resolved.
Termination thresholds
If an Employer incurs 6 failed funding strikes, or fails to resolve a failed funding for 90 calendar days, the Company is terminated from the platform.
Supported payment infrastructure
These policies define what payment rails and bank accounts Check supports for moving money to and from Employers.
Debit payment methods
Check only accepts the following payment methods for payroll debits: ACH, Wire, Instant payments (RTP, FedNow).
Other payment methods (such as paper check, e-check, online bill pay, Venmo, credit card) are not accepted. If Check receives funds via any of these methods, Check will attempt to return the funds to the sending party. Check will not process payroll or return a Company to good standing if funds are sent via any unsupported payment method.
Due to fraud risk, Check may retain funds for up to 60 days before returning them to the sending party.
Credit payment methods
Standard Risk Tier: Check uses the following payment methods for payroll credits: ACH, Instant Payments (RTP, FedNow). Check chooses available payment methods based on processing period, payroll timing, and the employee's bank. Employers cannot opt out of specific payment methods.
Low Risk Tier: Check only processes credits via ACH.
Bank accounts
Check only supports bank accounts connected via Plaid or directly (using account and routing number). For direct connections, Check only supports bank accounts with numerical account numbers; alphanumeric account numbers are not supported.
Risk sharing
Check offers a risk-sharing feature for Partners who want to override Check's credit decisions. This allows Partners to upgrade key accounts to accelerated processing at any time, in exchange for accepting credit risk on those accounts.
Risk sharing works as follows:
- Authorized users can log into Check Console and designate a Company for risk sharing. They can also define the length of the risk-sharing period (date range, number of payrolls, or unlimited).
- The Company can then approve accelerated payrolls during the risk-sharing period, regardless of any Check credit decision.
- If a risk-sharing Company has a failed funding, Check performs collections efforts as usual. If the failed funding is not recovered within 60 days despite collections efforts, Check will bill the Partner for any amounts lost.
- Risk sharing is available to Partners on a case-by-case basis and requires a contract amendment. Partners must have no overdue invoices to be eligible.
To manage risk sharing, users must have the "Cost Owner" user level in Console. Only "Cost Owner" users can add other "Cost Owner" users. To enable risk sharing and add the first "Cost Owner" user, contact your account manager.
Policy exceptions
Check will not grant exceptions to processing period decisions or failed-funding terminations, except in cases where technical issues in Check's system caused an incorrect decision or termination.
Check strives to develop credit policies that create the lowest-possible business impact for our Partners while maintaining a sustainable risk posture for Check. Partners who want more control over business and risk tradeoffs are encouraged to adopt our risk-sharing feature.
Last updated on May 31, 2025