• New York Pay Card Regulations Revoked, March 7, 2017 Implementation Halted
  • June 14, 2017 | Author: Katherine E. Whitney
  • Law Firm: Messner Reeves LLP - Denver Office
  • New regulations governing the use of payroll debit cards (also known as “pay cards”) in New York will not go into effect as planned on March 7, 2017.

    Yesterday, the New York Industrial Board of Appeals granted the petition of Global Cash Card, Inc. and declared regulations, which were approved by the New York State Department of Labor on September 7, 2016 and would have been codified at 12 NYCRR Part 192, invalid and revoked them. The regulations would have imposed several new restrictions on employers who use payroll debit cards and also prevented card issuers from charging employees common fees.

    The New York State Department of Labor’s rulemaking authority is limited to the relationship between employers and employees. The payroll debit card regulations at issue, the New York Industrial Board of Appeals explained, are invalid because the Department exceeded its rulemaking authority by attempting to place restrictions on financial institutions, a power delegated to the New York Department of Financial Services. The Industrial Board of Appeals also cited a significant departure from the plain language of the applicable statutes.

    The practical effect of the Board’s ruling is this: employers may opt to provide additional notices and information to employees, but they are not legally required to.

    As a reminder, employers must continue to comply with existing law governing the use of payroll debit cards, such as promptly paying all wages when due and obtaining advanced written consent from each employee before delivering wages through a payroll debit card.