Following his investigation of the issue, New York Attorney General Eric Schneiderman last week proposed the Payroll Card Act, which would require employers:

  • To permit employees to elect whether to be paid through a payroll card, direct deposit, or to receive a paper check;
  • To provide notice of payroll card program terms and conditions, including potential fees; and,
  • Not to use payroll card programs that charge certain types of fees, and require any program to have at least one network of ATMs where employees can obtain access to their wages without paying a fee.

New York’s current statute, N.Y. Labor Law § 192, expressly addresses only direct deposit, though New York agencies have interpreted the existing Labor Law to cover payroll cards. The statute will hopefully provide greater clarity to employers in this area.

State law regulation in the wage arena continues to expand, requiring continued attention from Legal, Human Resources and Compliance departments.