Thursday, March 30, 2017

Massachusetts Paycard Bill Based on New York’s Repealed Regulations

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PNN: MA Paycards

A Massachusetts bill (S.B. 1008) would place restrictions on paycard use similar to those included in the New York regulations that did not take effect on March 7, 2017. The Massachusetts bill was filed on January 19.

NY Rules Exceeded NYSDOL’s Authority
In February, the New York Industrial Board of Appeals ruled that the burdensome New York regulations regarding payment of wages by paycard and direct deposit, scheduled to take effect on March 7, 2017, were invalid and were revoked. The Board ruled that the regulations were invalid because they exceeded the New York State Department of Labor's (NYSDOL's) rulemaking authority by regulating banking services.

MA Legislature Is Not Exceeding Its Authority
The Massachusetts legislature is not overstepping its authority by proposing this legislation, but the American Payroll Association’s (APA) opposition to the proposed bill is consistent with its position on the New York regulations.

MA Bill Would Place Restrictions on Paycard Use
Massachusetts S.B. 1008 would impose a seven day cooling-off period between the time an employee requests or agrees to be paid by paycard and the time the employer takes action to issue a payment to that card. Notice and consent forms would need to be issued in multiple languages as well as free banking services would need to be provided to the paycard holders. Identical provisions in the New York regulations caused some employers to stop using paycards in New York, while card providers considered whether to cease offering their services in New York.

APA Will Comment
Currently, Massachusetts statutes and regulations on paycards only apply to employment, placement, or staffing agencies. If the legislature amends its law to regulate paycards for all employers, the APA will encourage measures that provide consumer protections for employees without threatening the viability of the payment method.

Check back with Pay News Now as we will continue to monitor the bill’s progress.