Proposed Regulations Attempt to Standardize How Employers Use Pay Cards to Pay Employees
According to Forbes, in 2013, pay cards were used to pay 5.8 million American workers1. And that number has only increased in the last couple of years. This large adoption of pay cards can be attributed to significant cost savings for employers. Eliminating the cost of paper checks can save an employer around $2.00 per employee check, on average, which can add up to millions of dollars.
While pay cards offer numerous benefits to employees as well as the employer, the New York State Attorney General’s office has received complaints from employees about receiving payment through pay cards. In response to the complaints, the NY Attorney General has proposed new requirements for employers who wish to pay their employees using pay cards.
Proposed Pay Card Regulations
The new regulations on the use of pay cards would require employers to:
- Obtain documentation of consent from employees before paying them via pay cards. Consent must be given without “intimidation, coercion, or fear of adverse action by the employer for refusal to accept the payroll debit card or pay card2.”
- Provide adequate information to employees regarding all the ways they can be paid and a statement regarding employee rights related to obtaining wages without incurring fees. Information must be provided in writing at least seven days before obtaining consent from the employee to enroll in a pay card program.
- Ensure that no employee will be charged direct or indirect fees in order to withdraw wages from their pay card account.
What Employers Should Do
Employers should review their payroll card programs to ensure that there are no fees for the employee to access wages. Additionally, employers should verify that employees have access to their earned money via in-network ATMs. Employers should also create documentation to provide to employees regarding their pay card program and train personnel to ensure pay card compliance.
How EPAY Can Help
EPAY Systems partners with SimplyPaidTM to provide pay cards to all EPAY customers. With our payroll cards, you can expect to save money quickly, and it won’t cost you or your employees a dime! We’ll get you implemented quickly, in line with all state regulations, and even give you the option to register the payroll cards at our time clocks! Contact us to learn more.