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Update on State Payroll Card Legislation

April 28, 2015 by rapid! PayCard

In 2015, ten states have considered legislation addressing payroll cards.  Several bills would make it easier for employers to implement electronic wage payment, others would impose restrictions on the use of payroll cards.  To date, the bills more favorable to payroll cards have passed.

FL and GA: Legislation in Florida and Georgia has been approved by both houses and awaits signature by their respective governors.  The Florida bill applies only to labor pools, and would allow labor pools to pay day laborers using payroll cards if certain conditions are met.  The Georgia bill applies to all employers and would statutorily authorize the use of payroll cards.  Employers will be able to pay employees using payroll cards so long as the employees are notified of potential fees and are given a form that allows the employee to opt out and request payment by check or direct deposit.

CT and RI: The Connecticut and Rhode Island bills are important because the wage and hour regulators in these states have advised employers that payroll cards may not be used in the absence of express statutory recognition.   Connecticut and Rhode Island are the only two states where the departments of labor question the lawfulness of payroll cards.  The Rhode Island bill has passed the house of origin and the prospects for passage in the second house look good.  The Connecticut bill is still in negotiations.

CO and WA: Restrictive legislation requiring employers to offer paper paychecks along with payroll cards and direct deposit introduced in Colorado and Washington has failed.  Both of these states currently appear to allow employers to give their employees the choice between direct deposit or payroll cards without offering a paper paycheck.

IA and MN: Restrictive legislation in Iowa also has failed but discussions regarding the payroll card language being added to another bill have are ongoing.  The legislative session ends at the beginning of May, so there is little time for this to happen.  A Minnesota bill that was designed to allow employers to require electronic wage payment was not acted upon and failed to meet legislative deadlines.

MA: Two payroll card bills are pending in Massachusetts.  Both bills would ensure that employees are able to access their full wages without cost and be notified of potential fees.  One of the bills would impose additional disclosure and consent requirements.  Neither bill has been acted upon, but the Massachusetts legislature is in session through November.

NY: A bill to address payroll cards was introduced by the state Attorney General but the bill is very restrictive and widely recognized as going too far.  A more favorable bill also is being considered.  At the same time, the New York State Department of Labor has included payroll cards on its regulatory agenda for 2015 suggesting that Department may issue regulations if legislators cannot agree on terms.

It is still possible that legislation will be introduced this year in a few other states, like Pennsylvania, that have long legislative sessions.

The information contained in this article and any other article do not reflect the views of rapid! PayCard®. 

Filed Under: Compliance Tagged With: legislation, paycard, payroll, updates

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