Specifies conditions for the payment of wages to employees by direct deposit to a payroll debit card

Summary of provisions

This bill amends Section 192 of the labor law, in relation to payment of wages by specifying conditions for the payment of the payment of wages to employees by direct deposit to a payroll debit card as follows:

1. Payment of wages shall be in lawful money of the United States or with checks drawn on financial institutions where employees can cash such checks for the full amount for which they were drawn.

2. An employer may arrange with a financial institution to pay the wages of an employee by direct deposit, provided that:

(2a) the employee must express in written consent to the direct deposit of his or her wages.

(2b) the employee should willingly be able to provide the consent needed in paragraph (a) without the intimidation, coercion, or fear of discharge from the employer.

(2c) the employee's consent as provided in paragraph (a) shall not be a condition of hire or continued employment.

(2d) the employee's wages may be subject to withdrawal and other dispo- sition by the employee in the same manner as if such deposit was made directly by the employee.

(2e) the employee shall be furnished with a statement of deductions made from his or her wages for each pay period such deductions were made.

(2f)the employee shall, on timely notice to the employer may be permit- ted to have his or her wages paid to the employee directly or as provided in subdivision four of this section, rather than through direct deposit or in subdivision four of this section.

3. Employees should be reimbursed as soon as possible if his or her account has been debited with a check-deposit-return fee, but no later than the next regularly scheduled payday.Reimbursement shall be of the

full amount of the check-deposit-return fee and shall not be paid to the employee as wages.

4. No employer should without the advance written consent of any employ- ee directly pay or deposit the net wage or salary of such employee to be deposited in a payroll debit card account unless the following condi- tions are met.

(4a) the employee shall first consent in writing to the deposit of his or her wages in a payroll debit card account.

(4b) the employee should willingly be able to provide the consent needed in paragraph (a) without the intimidation, coercion, or fear of discharge from the employer.

(4c) the employee's consent as provided in paragraph (a) shall not be a condition of hire or continued employment.

(4d) the employee man withdraw wages deposited into a payroll debit card account in the same manner as if such deposit had been made directly by the employee into an account maintained in a financial institution in the name of the employee.

(4e) the employee shall be permitted to withdraw his or her wages in full using the payroll debit card in lawful money of the United States without any fee or difficulty at least once per pay period.

(4f) the employee shall be furnished with a statement of deductions made from his or her wages for each pay period such deductions were made

(4g) the employee shall, on timely notice to the employer may be permit- ted to have his or her wages paid to the employee directly or as provided in subdivision four of this section, rather than through direct deposit or in subdivision four of this section.

5. An employer shall pay the full amount of wages due his or her employ- ees at least twice during each calendar month, on regular paydays desig- nated in advance by the employer.

6. This section shall not apply to any person in an executive, adminis- trative, or professional capacity whose earnings are in excess of nine hundred dollars a week, nor to employees working on a farm not connected with a factory.

7. Definitions of terms used in sections

(7a) "check-deposit-return fee" means a charge which results from a payroll check having been returned due to insufficient or uncollected funds.

(7b)"direct deposit" means payment of the wages of an employee by caus- ing the amount of such employee's wages to be deposited in an account or accounts maintained in a financial institution.

(7c) "financial institution" means any state or federally chartered institution authorized to accept deposits in New York

(7d) "payroll debit card" means an encoded card issued by a financial institution which gives employees access to wages in a form that is equivalent to payment of lawful money of the United States.

Justification

This legislation recognizes the benefits to employers by providing the option to receive wages on a payroll card. This option would give employees a safe and reliable means to receive wages, by allowing them to access their wages at ATMs, banks and merchant locations without having to incur fees for check cashing or carry large amounts of cash. This bill would also provide financial institutions with a manner to deliver services to traditionally "unbanked" people. Payroll cards provide employers with a less expensive way to deliver wages than paper checks, which is particularly useful when an employee does not have access to direct deposit services.

Legislative history

New bill.

Fiscal implications

None to the state.

Effective date

Ninetieth day after it shall have become law.