NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A6608
SPONSOR: Perry TITLE OF BILL: An act to amend the labor law, in relation to specify-
ing conditions for the payment of wages to employees by direct deposit
to a payroll debit card
PURPOSE:
The purpose of this legislation is to establish conditions for which an
employer may arrange with a financial institution to pay the wages of an
employee by direct deposit, which include the employee's consent in
writing, and the option for the employee to timely elect not to have
their wages paid via direct deposit to a payroll debit card.
SUMMARY OF PROVISIONS:
This bill amends Section 192 of the labor law, in relation to payment of
wages by specifying conditions for the payment of the payment of wages
to employees by direct deposit to a payroll debit card as follows:
1. Payment of wages shall be in lawful money of the United States or
with checks drawn on financial institutions where employees can cash
such checks for the full amount for which they were drawn.
2. An employer may arrange with a financial institution to pay the wages
of an employee by direct deposit, provided that:
(2a) the employee must express in written consent to the direct deposit
of his or her wages.
(2b) the employee should willingly be able to provide the consent needed
in paragraph (a) without the intimidation, coercion, or fear of
discharge from the employer.
(2c) the employee's consent as provided in paragraph (a) shall not be a
condition of hire or continued employment.
(2d) the employee's wages may be subject to withdrawal and other dispo-
sition by the employee in the same manner as if such deposit was made
directly by the employee.
(2e) the employee shall be furnished with a statement of deductions made
from his or her wages for each pay period such deductions were made.
(2f)the employee shall, on timely notice to the employer may be permit-
ted to have his or her wages paid to the employee directly or as
provided in subdivision four of this section, rather than through direct
deposit or in subdivision four of this section.
3. Employees should be reimbursed as soon as possible if his or her
account has been debited with a check-deposit-return fee, but no later
than the next regularly scheduled payday.Reimbursement shall be of the
full amount of the check-deposit-return fee and shall not be paid to the
employee as wages.
4. No employer should without the advance written consent of any employ-
ee directly pay or deposit the net wage or salary of such employee to be
deposited in a payroll debit card account unless the following condi-
tions are met.
(4a) the employee shall first consent in writing to the deposit of his
or her wages in a payroll debit card account.
(4b) the employee should willingly be able to provide the consent needed
in paragraph (a) without the intimidation, coercion, or fear of
discharge from the employer.
(4c) the employee's consent as provided in paragraph (a) shall not be a
condition of hire or continued employment.
(4d) the employee man withdraw wages deposited into a payroll debit card
account in the same manner as if such deposit had been made directly by
the employee into an account maintained in a financial institution in
the name of the employee.
(4e) the employee shall be permitted to withdraw his or her wages in
full using the payroll debit card in lawful money of the United States
without any fee or difficulty at least once per pay period.
(4f) the employee shall be furnished with a statement of deductions made
from his or her wages for each pay period such deductions were made
(4g) the employee shall, on timely notice to the employer may be permit-
ted to have his or her wages paid to the employee directly or as
provided in subdivision four of this section, rather than through direct
deposit or in subdivision four of this section.
5. An employer shall pay the full amount of wages due his or her employ-
ees at least twice during each calendar month, on regular paydays desig-
nated in advance by the employer.
6. This section shall not apply to any person in an executive, adminis-
trative, or professional capacity whose earnings are in excess of nine
hundred dollars a week, nor to employees working on a farm not connected
with a factory.
7. Definitions of terms used in sections
(7a) "check-deposit-return fee" means a charge which results from a
payroll check having been returned due to insufficient or uncollected
funds.
(7b)"direct deposit" means payment of the wages of an employee by caus-
ing the amount of such employee's wages to be deposited in an account or
accounts maintained in a financial institution.
(7c) "financial institution" means any state or federally chartered
institution authorized to accept deposits in New York
(7d) "payroll debit card" means an encoded card issued by a financial
institution which gives employees access to wages in a form that is
equivalent to payment of lawful money of the United States.
JUSTIFICATION:
In 2012 $34 billion was deposited onto 4.6 million active payroll cards.
According to research from Aite Group by 2017, the amount is expected to
reach $68.9 billion deposited to 10.8 million cards.Although these meth-
ods of payments to employees are cost effective to employers, it leaves
many employees short changed as countless fees are charged when payments
are withdrawn. Ensuring that employees have the right to request alter-
native forms of payment such as direct deposit, or other forms of
payment are crucial for employees who have accounts outside of those
established by the employer.
Providing employees with the option to specify their conditions of
payment without fear of retaliation by the employer is critical for
employees in the workplace. This option allows employees the ability to
receive full paycheck without fear of being charged outstanding fees for
withdrawals as is customary with payroll debit cards.
PRIOR LEGISLATIVE HISTORY:
New Bill
FISCAL IMPLICATIONS:
EFFECTIVE DATE:
This act shall take effect on the ninetieth day after it shall have
become a law.
