New York State Issues Draft Reg for Payroll Cards (June 1, 2015)
New York State’s Department of Labor has published draft regulations for businesses that pay workers with debit cards, including a prohibition on employers profiting from card programs or passing along associated costs to their employees. The industry has until July 10 to submit comments.
“We have drafted these regulations to ensure a balance between convenience and cost-prohibitive fees,” Department of Labor Acting Commissioner Mario J. Musolino said in a statement. The state estimates 13,000 businesses pay approximately 200,000 workers through debit cards.
The regulations require employee consent to being paid by debit card; written disclosures about the card program must be provided, including locations employees can access their wages at no charge in “reasonable proximity” to employees’ home or work. The regulations, among other mandates, also prohibit fees for inactivity, overdraft, declined transactions or receiving written transaction statements.
“The NBPCA is currently reviewing the proposed rule, but we are always concerned about proposals that could potentially limit wage payment options,” says Brad Fauss, NBPCA interim executive director and general counsel. “Payroll cards help businesses reduce costs and fraud and they provide employees without checking accounts a safe, secure and convenient way to receive and manage wages,” he tells Paybefore.
The rules, which were published in the State Register last week, take effect following a 45-day notice and comment period. July 10 is the deadline to submit comments, which may be submitted to Michael Paglialonga, NYS Department of Labor, Building 12, State Office Campus, Room 509, Albany, N.Y. 12240, email: [email protected].