June 1, 2015 Labor /Human Resources Committee News
Contact: Frank Kerbein
Proposed regulations governing the use of pay cards
The Business Council is seeking input from HR/Labor Committee members on proposed regulations governing the use of pay cards. Note that this proposed rulemaking also would impose additional requirements on the use of paychecks as well.
On May 27th, the NYS Department of Labor published in the NYS Register proposed regulations providing clarification and specifications as to the permissible methods for the payment of wages, including guidance on the use of payroll debit cards. regulations providing clarification and specifications as to the permissible methods for the payment of wages, including guidance on the use of payroll debit cards. Click here for the proposed rules.
Specifically, these regulations would put additional burdens on employers in providing to employees a list of financial institutions that would be willing to cash checks or redeem pay cards without charging transaction fees.
- This proposal would only apply to payments to non-executive, administrative or professional employees earning $900/week or less.
- It would require that, if an employer uses the pay card option, they can only be used with the consent of employees, they must be provided with no charges or fees for transactions necessary to access wages, the employer must assure employee access to an ATM network providing no charge withdrawals, and the employer must provide electronic or paper statements, transactions history and balance information. Paycard use fees are also prohibited for point of sales transactions, overdrafts, or other common services.
- In addition, the proposal would also create a new requirement that employers provide employees with “at least one means of no-cost local access” to the full value of paychecks, and prohibits any fees for the replacement of a lost paycheck.
- It also contains a new requirement that employers maintain written record of employees’ consent to direct deposits for six years, and that direct deposits have to be at a bank of the employee’s choosing.
The Department has no public hearings scheduled, and is accepting comments through July 10th. This proposal raises numerous concerns for employers and financial institutes alike, and we will be submitting extensive comments on this proposal.
The Business Council has concerns as to how these proposed rules would impact employers and we want to know what you think. Please contact me with any comments you may have.