B2B Payments

Workers’ Union Creates Payroll Card In Response To Dues Regulations

A major workers’ union in the U.S. has developed its own payroll debit card with ADP in response to proposed regulations that would impact the ability for unions to have member dues deducted automatically from paychecks. Reports in Bloomberg on Tuesday (Oct. 9) said the Service Employees International Union (SEIU) Local 2015  the largest U.S. home healthcare union, representing an estimated 385,000 in-home healthcare employees in California  is launching a pre-paid debit card, co-branded with ADP.

It’s an effort by the union to ensure member dues are paid as unions prepare for upcoming regulations that could restrict unions’ automatic collection of fees from members, a proposal from the Trump Administration that limits “states’ ability to send money from Medicaid to ‘third parties,'” reports explained. Medicaid said the move would prevent states from being able to automatically deduct union dues from member paychecks, as the states are the ones that employ in-home healthcare service providers.

The launch of a debit card means workers can authorize ADP to load their state paychecks onto their cards, then route dues to the SEIU. Those cards can also be used to pay bills, cash checks and store government benefits, reports said. According to the union, the cards may be particularly beneficial for workers without a bank account.

ADP reached out via email with this comment: “We ensure we are compliant with all applicable laws and regulations. Additionally, all voluntary deductions from pay must be authorized by the employee.”

The strategy comes as the SEIU Local 2015 prepares to launch its “recommitment” campaign in an effort to retain or gain up to 100,000 workers.

Challenges to union fee payments come after the U.S. Supreme Court ruled in a five-to-four decision in June that mandatory union dues violate constitutional rights in the public sector. Bloomberg noted that the ruling means unions can no longer require non-members to pay union fees, despite their legal obligation to represent all workers covered by a contract.


New PYMNTS Report: The CFO’s Guide To Digitizing B2B Payments – August 2020 

The CFO’s Guide To Digitizing B2B Payments, a PYMNTS and Comdata collaboration, examines how companies are updating their AP approaches to protect their cash flows, support their vendors and enable their financial departments to operate remotely.