The Business Council supports this legislation which would clarify the methods for payment of wages to include debit cards. Under current statute, Section 192 of the Labor Law, and Department of Labor guidelines, employers are expressly permitted to pay their employees either with cash, check, or by direct deposit with approval of the employee. While not prohibited by current statute-pay cards have been authorized by Department of Labor interpretations of current law-there is no express language that provides guidance to employers on how to offer this payment option.
We believe this bill removes any ambiguity in current law, and will provide a safe, reliable, and for some workers, less expensive method for receiving wages. Specifically, the bill provides that employees must be allowed at least one withdrawal or transfer from the payroll each and every pay period without charge for any amount up to and including the full amount of the employee's wages. The bill also mandates that employees be provided a means to check their payroll card balance through an automated telephone system and by electronic means without charge.
Payroll debit cards are particularly helpful to the many thousands of New York workers who are without checking accounts. Many forgo opening an account with a bank due to cost concerns of having an account, the inability to qualify for an account due to past banking misuse, cultural factors or other reasons. As a result, many of these â€œunbanked" citizens are forced to carry large amounts of cash and/or rely on check cashing services that usually assess significant fees, reducing hard earned wages.
Debit cards alleviate this check-cashing-fee problem by providing employees with a more efficient way to receive their wages, which they would be able to access at ATM's or any bank location without having to pay any fees.
This bill will help employers by allowing them to offer a less expensive, environmentally friendly way to deliver wages than paper checks. It will also provide financial institutions with a manner to deliver services to unbanked workers who have been left out of the financial mainstream.
As a nation, we are steadily moving away from cash and checks for a whole range of services. As example, the New York Department of Labor currently pays unemployment benefits via debit card, public assistance benefits are paid via debit card, and tax refunds and Social Security benefits are soon to follow. Using debit card payment is faster, cheaper, more reliable, and helps bring the unbanked into the financial mainstream. This bill will provide greater clarity to employers who wish to offer this method for payment of wages.
For these reasons we strongly support the passage of S.4392-A (Gallivan) / A.6419-A (Morelle).