Tuesday, February 24, 2015

Payroll Card Legislation Already a 2015 Hot Topic


The start of any new year often brings proposed legislation in Washington, D.C., and in state legislatures around the country, and 2015 is shaping up to be no exception. As of February 11, a total of 8 states have introduced bills to regulate payroll cards. Here are a few examples:

  • In Colorado, Senate Bill 101 would allow employers to make all wage payments electronically to a bank account or a payroll card. The bill would have to allow the employee seven days to provide a bank account number before issuing a payroll card.
  • In Connecticut, Senate Bill 430 would prohibit employers from requiring employees to accept their pay on a payroll card as a condition of employment.
  • Florida introduced companion bills, House Bill 325 and Senate Bill 456, which would include payroll cards and direct deposit as acceptable methods by which labor pools might pay day laborers.
  • Companions bill were also introduced in Iowa—House Bill 94 and Senate Bill 1004 would codify an employer’s ability to pay wages by payroll card. The bills provide that employees paid by payroll cards would have to be allowed at least one free withdrawal per pay period, no less than two withdrawals per month, and unlimited free access to account balances by telephone.
  • Minnesota Senate Bill 444 would allow employers, in certain instances, to give employees the choice between payroll cards and direct deposit without the option of a paper check; however, the bill’s intent contains confusing language, so the APA is working on suggesting alternative language.
  • New York Assembly Bill 3109 and Senate Bill 2590 are companion bills that would recognize payroll cards as an acceptable method of payment in the state. The bills contain several provisions regarding written employee authorization, offering direct deposit as an alternative, and providing employees a list of potential fees.

In 2014, 19 states introduced more than 20 bills regarding payroll cards. Only four of those bills were enacted, so many of those states are expected to revisit the topic in 2015.

Read the February issue of Inside Washington for a more detailed discussion on these bills.