Payroll Cards 2015 Legislation

Heather Morton 5/21/2015

Payroll cards are designed as a alternative method of wage payment, compared to a paper check or direct deposit.

They operate similar to prepaid debit cards. An employer can load the employee’s wages directly onto a card that is issued by a financial institution. The payroll cards can be branded with the logo of the major credit card brands with like American Express, Discover, MasterCard or Visa. Payroll cards can be used to make purchases in stores or online, pay bills and access cash through ATM withdrawals, bank tellers or through convenience checks.

Payroll cards are a safe and convenient method to receive wages when compared to cash or a paper check. Payroll cards have the same protections as traditional debit cards under the Federal Reserve Board’s Regulation E. While payroll cards offer ease and convenience, questions have been raised regarding the fee structures, whether payroll card programs and employers provide clear and adequate notice of the fees, how to avoid the fees and whether employees have a choice between receiving a paper check, direct deposit or a payroll card.

Twenty-one states and Puerto Rico have enacted legislation authorizing the use of payroll cards. Legislation in 19 of those states—Arizona, Florida, Georgia, Hawaii, Illinois, Kansas, Maine, Maryland, Michigan, Minnesota, Nebraska, New Hampshire, North Dakota, Oklahoma, Oregon, Puerto Rico, Tennessee, Vermont, Virginia and West Virginia—and Puerto Rico apply to any employers while Texas and Washington enacted legislation specific to institutions of higher learning.

Payroll Cards Enacted Legislation Map

Payroll card-related legislation has been introduced or is pending in 12 states in the 2015 legislative session. Florida enacted legislation regulating the use of payroll cards by labor pools. Under the new law, labor pool employers must give notice prior to the first pay period if the employer intends to use a payroll card program. And, the labor pool must give the laborers a list of businesses within close proximity to the labor pool’s location where free withdrawals can be made. Georgia enacted legislation authorizing payroll cards. Kansas, in its definition of a payroll card, deleted that a payroll card must be a machine readable instrument.

State: Bill Number: Bill Summary:
Payroll Cards 2015 Legislation
Alabama None  
Alaska None  
Arizona None  
Arkansas None  
California None  
Colorado

S.B. 101

Postponed indefinitely 3/18/15

The bill allows employers, at their discretion, to pay wages by electronic credit transfer to an employee's account in a financial institution or to deposit wages on a paycard.
Connecticut

S.B. 430

Failed Joint Favorable deadline 3/17/15

Prohibits employers from requiring that employees accept payroll cards in lieu of wages as a condition of employment.
Connecticut S.B. 908 Allows employers to pay employee wages using payroll cards, and allows certain wage and hour information provided by an employer to employees be delivered electronically provided certain conditions are met.
Delaware None  
District of Columbia None  
Florida

H.B. 325

Laid on table 4/8/15

S.B. 456

Signed by governor 5/14/15, Chapter 20

Amends §448.24; revises the methods by which a labor pool is required to compensate day laborers; requires a labor pool to provide certain notice before a day laborer’s first pay period; specifies requirements for a labor pool that selects to compensate a day laborer by payroll debit card; authorizes a labor pool to deliver a wage statement electronically upon request by the day laborer.
Georgia

S.B. 88

Signed by governor 5/5/15, Act 85

Amends Title 34 of the Official Code of Georgia Annotated, relating to labor and industrial relations, to provide for the payment of wages by credit to a payroll card account; provides for a definition; changes certain provisions relating to payment of wages by lawful money, checks, or credit transfer and selection of payment dates by employers; requires employers to offer employees certain choices and information relating to the payment of wages.
Guam Not available  
Hawaii None  
Idaho None  
Illinois None  
Indiana None  
Iowa H.S.B. 94 Permits the voluntary receipt by employees of payment of wages by debit card or pay card and makes penalties and remedies applicable.
Iowa

S.F. 460

Passed Senate 3/17/15

S.S.B. 1004

Became S.F. 460 3/9/15

Permits the voluntary receipt by employees of payment of wages by debit card or pay card and makes penalties and remedies applicable.
Kansas

S.B. 240

Signed by governor 4/16/15

Amends the definition of a payroll card.

Kentucky None  
Louisiana None  
Maine None  
Maryland None  
Massachusetts H.B. 1693

Protects wages of employees who receive wages through an electronic wage card.

Massachusetts H.B. 3261

Protects wages of employees who receive wages through an electronic wage card.

Michigan None  
Minnesota S.F. 444

Regulates payment of wages using a payroll card account.

Mississippi None  
Missouri None  
Montana None  
Nebraska None  
Nevada None  
New Hampshire None  
New Jersey A.B. 154

Concerns alternate methods of wage payment.

New Jersey A.B. 1351

Limits fees charged in connection with certain prepaid debit accounts; requires access to certain account information.

New Jersey A.B. 1718

Concerns methods of paying wages.

New Mexico None  
New York

A.B. 3109

S.B. 2590

Clarifies methods for the payment of wages and authorizes the payment of wages by use of payroll cards.

New York

A.B. 5968

Enacting clause stricken 5/6/15

Authorizes and regulates the use of payroll card accounts.

New York

A.B. 6608

S.B. 5281

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

New York

A.B. 6811

S.B. 4685

Authorizes and regulates the use of payroll card accounts.

North Carolina None  
North Dakota None  
N. Mariana Islands Not available  
Ohio None  
Oklahoma None  
Oregon None  
Pennsylvania None  
Puerto Rico None  
Rhode Island H.B. 5590 This bill allows, subject to an employer's consent, an employee to set up a payroll card account with his or her financial institution which can accept electronic transfer credit of wages from the employer.
Rhode Island S.B. 351 This bill allows, subject to an employer's consent, an employee to set up a payroll card account with his or her financial institution which can accept electronic transfer credit of wages from the employer.
South Carolina None  
South Dakota None  
Tennessee None  
Texas None  
Utah None  
Vermont None  
Virginia None  
Virgin Islands None  
Washington

H.B. 1211

Passed House 3/11/15

Requires an employer to: (1) Offer a method of wage payment that allows an employee to obtain his or her wages in legal tender of the United States without fees or costs for the transaction; and (2) Offer an employee at least one other method of receiving wages that does not require the employee to maintain or open an account for purposes of direct deposit if the employer credits employee wages to a payroll card account.
West Virginia

S.B. 318

Signed by governor 3/26/15, Act 153

Relates to payment of wages by employers and authorizes payment of employees twice a month.
Wisconsin None  
Wyoming None  

 

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Heather Morton is a program principal in Fiscal Affairs. She covers financial services, alcohol production and sales, and medical malpractice issues for NCSL.

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