CLIENT UPDATE

Putney, Twombly, Hall & Hirson LLP
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Tel: (212) 682-0020

 

July 10, 2014

New York Attorney General Supports Bill Regulating
The Use of Payroll Cards

Based on recommendations made in a report by the Attorney General’s Labor Bureau, on June 13, 2014, New York Attorney General Eric T. Schneiderman joined with Assembly Majority Leader Joseph D. Morelle and Senator Patrick Gallivan in proposing the Payroll Card Act, proposed legislation that would regulate the use of payroll cards. 

If enacted, the Payroll Card Act will require employers to obtain the employee’s written, informed consent to participate in a payroll card program, and to provide workers with a choice regarding whether to receive their pay through reloadable payroll cards or through an alternative method of payment, such as traditional paper check or direct deposit into an account designated by the employee.  Additionally, the Payroll Card Act will require certain protections, such as mandating clear disclosure of terms and fees associated with payroll cards, restricting other specific payroll card fees, and ensuring that employees have access to at least one network of ATMs, within reasonable distance of their work or residence, where wages can be withdrawn free of charge.  

The links for the proposed legislation and other information are as follows:

The proposed Payroll Card Act (Bill No. A10056) can be found by clicking here.

New York State Attorney General’s Labor Bureau report can be found by clicking here.

Take Away for Employers

If the Payroll Card Act is passed, employers should review their payroll card programs to ensure compliance.  Specifically, employers must provide employees with clear and appropriate notice of potential fees associated with the use of payroll cards, must obtain employee’s consent to enroll in a payroll card program, and must ensure that there is at least one network of ATMs where employees can obtain access to their wages without paying a fee.

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If you have any questions regarding the proposed Payroll Card Act or related issues, please do not hesitate to contact us.  We will update you if the proposed Payroll Card Act becomes law.