B2B Payments

NY Lays Down The Law On Payroll Cards

The recent legal controversies involving payroll cards have caused some lawmakers in New York to take a fresh look at the payment technology. The NY State Department of Labor earlier this year proposed new regulations aimed at curbing the fees associated with paycards, which some lawsuits have challenged as unfair to the workers receiving their paychecks through the cards.

The latest reports on the matter say that the NY State Department of Labor has now revised those proposed rules, and published the new proposals Wednesday (Oct. 28).

In a breakdown of the revisions, which also include language on the use of paychecks, Lexology reports note that the NYSDOL is recommending that employers must provide notice to their employees of the terms and conditions of the use of direct deposit or payroll cards, and employees must give consent for those processes.

Employers should break down all options for employees to receive their wages, the department suggests, and should include a statement that they will not require employees to accept wages via paycard.

The language also states that employers should agree that their employees will not be charged fees linked to their ability to access wages, and include a list of locations next to their work where they can access their wages without these fees.

[bctt tweet=”Employees will not be charged fees linked to their ability to access wages”]

According to reports, the revisions, compared to the proposals first published in May, maintain the ban of employees discriminating employees that do not give consent to these payroll technologies, but expands upon the proposal that employees are banned from “unfair, deceptive or abusive practices” to cover not just payroll cards, but any payment method of employee wages.

When it comes to the paper paycheck, the department includes proposals that employees must ensure that the check is “a negotiable instrument,” and that an employee can access their wages by either depositing or cashing the check without fees, and that the employer does not impose fees linked to checks it issues to its employees.

The proposals also recommend that employees check with their employers about the potential fees associated with their method of accessing wages.


To check out what else is HOT in B2B, click here.



The pressure on banks to modernize their payments capabilities to support initiatives such as ISO 20022 and instant/real time payments has been exacerbated by the emergence of COVID-19 and the compelling need to quickly scale operations due to the rapid growth of contactless payments, and subsequent increase in digitization. Given this new normal, the need for agility and optimization across the payments processing value chain is imperative.