B2B Payments

New York Payroll Card Regulation Fight Wages On

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In the latest development in New York state’s debate over payroll card regulation, Department of Labor has reportedly appealed an earlier decision that invalidated and revoked earlier regulations on payroll cards issued by the Department.

Reports this week said the New York State Department of Labor appealed the Industrial Board of Appeals’ decision, issued earlier this year. At the time, the Board of Appeals said the regulations on payroll cards overstepped the Department of Labor’s jurisdiction.

“We find the regulations are invalid because they exceed rule-making authority,” it stated last February. The regulations, it continued, overlapped bank regulations on payroll card fees.

The rules were initially set to come into effect last March but have since been in legal limbo.

New York labor regulators are trying to regulate payroll cards in an effort, they say, to protect employees against unfair fees they face for accessing funds from those cards, using those cards or other activities. The rules would require employers to provide adequate information on payroll cards and how to access their wages without fees, and employers would also have to receive consent from workers to pay wages via payroll cards.

The proposals have set off a broader debate over payroll technologies. Some analysts say the rules would force employers to use paper paychecks, which are costly. The American Payroll Association’s Director of Government Relations Bill Dunn had previously stated New York’s efforts to be “a solution without a problem.”

Still, others are in favor of the regulations and say that employees face unfair fees when they are paid via payroll card.

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