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New York State Regs Governing Payroll Debit Cards

The New York State Department of Labor (NYSDOL) issued final regulations last September that would significantly increase requirements for employers using payroll debit cards as a method of wage delivery.

The new rules, set to take effect on March 7, 2017, were blocked on February 16, 2017 by the New York State Industrial Board of Appeals.

Current New York State law makes it illegal for an employer to require the use of a payroll debit card. A New York employer may offer a payroll debit card to its employees, but the state requires employers to obtain advance consent from an employee before making wage payments using a pay card. Also, employers can’t charge employees directly or indirectly for receiving wages.

The rescinded regulations included additional employer obligations including: the need to provide employees with access to at least one ATM (automated teller machine) within a reasonable travel distance from home or work, provide unlimited free withdrawals from the payroll debit card, and provide notices to employees about their rights regarding receiving wages - in the employee’s primary language.

The NYSDOL can still appeal the Board’s decision. New York employers are advised to continue to follow the pre-existing guidance on the use of payroll debit cards and watch this issue closely. Employers may also wish to ensure that when providing payments by payroll debit card, that employees have access to at least one ATM machine or bank teller that offers withdrawals at no cost to the employee.