Payroll Card Use is On the Rise
By Bill Dunn, CPP State News
Illinois is the latest state to enact a law regulating the use of payroll cards. The law will go into effect on January 1, 2015. This brings the total number of states with laws or regulations addressing payroll cards to 21.
This law addresses many of the common concerns surrounding payroll cards. One major provision of the law states that employees must explicitly agree to the payment method. This means that if an employee does not agree to be paid by payroll card, the employer cannot automatically sign up the employee for a payroll card. This remains true even if the employee in question does not have a bank account. Along with being voluntary, payments by payroll card cannot be a condition of employment.
The law also sets some minimum standards for payroll card programs. Employees must be provided with at least one free withdrawal of the full balance of the card every pay period. A written transaction history must also be made available upon request and free of charge to the employee.
The law also prohibits a number of fees. For any payroll card program offered to employees in Illinois there should be:
- No initiation or loading fees
- No fees for accessing the card balance by phone
- No fees for point-of-sale transactions
- No inactivity fees until a full year of inactivity has passed
- Two waived fees per month for any declined transactions
This new legislation is opening the door for greater adoption of payroll cards. Here at EPAY, we are committed to lowering costs for employers, so we’ve partnered with SimplyPaid™ to provide payroll cards. With our payroll cards, you can expect to save about $3 per paper check every pay period. 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.