Payroll Cards

Many employers are choosing to use payroll cards as a convenient option to pay wages.  Federal law prohibits employers from mandating the use of payroll cards unless employees are permitted to choose between a payroll card and at least one other alternative method to receive wage payment.  At least 31 states have laws governing the use of payroll cards, including when written consent to pay wages by payroll card is required, and what disclosures must be made to employees before payroll cards may be used.  For example, Illinois requires employers to inform employees that they are entitled to make two declined transactions per month without fee, and North Dakota requires that the payroll card must be issued by a federally insured bank or credit union.  Failure to abide by state statutes regarding the proper use of payroll cards may subject an employer to wage and hour claims, as well as applicable fines and fees.  Questions on whether your business’s use of payroll cards complies with the laws of your state?  myHRcounsel can provide state-specific fact sheets and authorization forms to ensure that your payroll policies are in compliance.