- Pennsylvania Employers May Legally Pay Employees’ Wages via Payroll Debit Cards
- January 12, 2017 | Authors: Sally Griffith Cimini; Heather S. Heidelbaugh; Michael Metcalfe
- Law Firm: Leech Tishman - Pittsburgh Office
- On November 4, 2016, Pennsylvania Governor Tom Wolf signed into law Senate Bill 1265 (the “Bill”), confirming that Pennsylvania employers may legally pay their employees’ wages via payroll debit card and providing additional protections to employees who elect to receive their wages in that manner. The Bill takes effect in May 2017.
The Bill resolves the uncertainty surrounding payroll debit cards, and whether they comply with the Pennsylvania’s Wage Payment Collection Law (‘WPCL”)’s method provision. Specifically, the WPCL’s method provision mandates that “wages shall be paid in lawful money of the United States or check.”
The new Bill resolves that uncertainty. Under the new law, the use of payroll debit cards is permitted, if certain prerequisites are met.
Among other things, the Bill provides that:
Acceptance of payment by payroll debit card is voluntary and cannot be required of any employee as a condition of employment;
Employees cannot be charged fees for weekly withdrawals (including ATM withdrawals), for balance inquiries, for the initiation of the payroll card program, for the issuance of the initial payroll card and one replacement card per year, for the transfer of wages or other payments from the employer to the payroll card account, for point-of-sale purchase transactions, or for account inactivity of less than 12 months; and
Funds deposited in a payroll debit account can never expire.
You can read a full copy of the Bill, here. Senate Bill 1265 takes effect in May 2017. Companies that offer payment of wages via payroll debit card will need to ensure that their payroll card programs comply with all provisions of Senate Bill 1265 by that date.
Since payment by payroll debit card cannot be mandated by employers, Leech Tishman strongly recommends that employers obtain a signed authorization form from any employee who consents to payment by payroll debit card or direct deposit.