The Business Council supports S.5208-A / A.6771-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 of pay cards, and provide employees important statutory protections.
Under the provisions of the bill, employers can offer payment of wages by several methods: paycheck, automatic deposit or wage payment by payroll card. In order for an employee to receive wages via electronic fund transfer or a payroll card, the employee is required to explicitly provide authorization in advance to receive payment by such method. If an employer offers employees the option of receiving wages by use of a payroll card, the employer must provide the employee with information listing all methods of payment of wages; the terms and conditions regarding the use of payroll cards including how to access balance information without costs.
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 withdrawal at an in-network ATM transaction each week without charge. 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 contrast, if employees choose to use a payroll card, the cost-free transactions available each pay period, provides them with a significant benefit, reducing their pay-access fees by up to $300 per year or more.
Additionally, employers’ administration of payroll will be facilitated by specifically providing the parameters of the various payments of wages options that are available under state law and regulations.
The Business Council believes this is a balanced, reasonable bill that addresses the concerns of both employees and employers. For these reasons we strongly support adoption of S.5208-A / A.6771-A.