The Business Council supports S.2590-A/A.3109-A which would clarify the rules and requirements for using paycards as a method of payment of wages under New York State Labor Law. The use of payroll cards are authorized in New York by Department of Labor interpretations of current law, however there is no express language that provides guidance to employers on how to offer this payment option. This bill removes ambiguity in the current Labor Law and would provide employers with explicit provisions for the use pay cards, and provide employees important statutory protections.
Under the provisions of the bill, employees would be able to elect wage payment by payroll card, if this option were offered by the employer. The employer is required to also offer payment by paycheck and automatic deposit.
Employees electing to be paid through the paycard option would be allowed at least one free withdrawal or transfer from their payroll card per pay period, for an amount up to the full amount of wages, and one additional charge-free ATM transaction per pay period. Employees would also be given a cost-free method to access payroll card account balances and transaction history.
Payroll cards are particularly helpful to the many thousands of New York workers who are without checking accounts. Under state regulations, these “unbanked” citizens who typically choose to cash their paychecks at a check casher lose up to 2 percent of their paycheck each time one gets cashed. By requiring cost-free transactions each pay period, this legislation provides these employees with a significant benefit, reducing their pay-access fees by up to $300 per year or more.
Additionally, the bill will provide employers clear state rules for use of this additional option for administering payroll.
We believe this is a balanced, reasonable bill that address the concerns of both employees and employers.
For these reasons we strongly support adoption of S.2590-A/A.3109-A.