Last November, Pennsylvania Governor Tom Wolf signed into law the Payroll Cards (pay cards) Bill S.B. 1265. This law became effective May 3, 2017. Until it was passed, there were no explicit regulations surrounding pay card use in Pennsylvania. Most businesses treated the use of pay cards with the same regulations as direct deposits.
The prior regulations included in Pennsylvania Stat. 7.6121 & 7.6122:
Direct deposit cannot be required by the employer
Direct deposit must be signed for in writing (or electronic signature)
The employee must receive a detailed pay statement
Bank of deposit must be at the sole discretion of the employee
The employee can withdraw consent and receive a paper check within a reasonable amount of time
The new law goes into additional details specific to payroll cards. They include:
Pay cards must comply with Federal law 12 CFR Part 1005 on electronic funds transfers (Regulation E)
Funds must be with an FDIC-insured institution
Pay cards cannot be a condition of employment or required for receipt of benefits
Notice must be issued to the employee with:
Wage payment options
Terms, conditions and fees for pay card account option
Notice of third-party fee assessments
Methods for accessing funds without fees
Pay cards must
Allow employee at least one free withdraw per pay period
Permit one in-network ATM withdraw each pay period
Provide means of assessing balance via phone or internet
Never cause funds to expire
Pay card providers cannot charge fees for:
Application or initiation of card
Issuance of initial card
One replacement card per calendar year
Transfer of wages from employer to employee
Purchase transactions at point of sale
Non-use or inactivity fees for less than 12 months in duration
Nothing included in this law should override the terms of any collective bargaining agreement.
If you have any questions about the use or implementation of a payroll card program, contact Tina M. Frysinger at 412.697.5209 or [email protected].
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