New York Eyes Payroll Debit Cards

The New York State Department of Labor said earlier this month through a published proposed rule that current consents are invalid for direct deposit and must be reinstated by employees. The comment period is through July 15 of this year.

Employees must be notified in English or their primary language before being paid by direct deposit or through a paycard. They must be informed about all their payment options and that they need not accept a payroll debit card. There will be a seven-day waiting period for the paycard, according to the proposed rule.

In addition, employees must not pay to access their wages. For cards specifically, employees must be notified where they can withdraw funds in locations near their workplace or residence and that allow for unlimited free withdrawals. Anything that falls short of this is invalid, said the Labor Department. Employees should be able to withdraw their consent at any time, said the department.

In New York, employers must provide employees with notices tied to direct deposit and paycards, gather new written consents and then determine whether current practices mirror the newly created and extended mandates.

If there are no new consents obtained on an employee-by-employee basis, payments by direct deposit or cards must be suspended and paper checks issued instead.