PA Law on Payroll Card Use

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].

Visit the “Our Thoughts On” blog for additional state and local tax updates as they become available 

You’ve heard our thoughts… We’d like to hear yours

The Schneider Downs Our Thoughts On blog exists to create a dialogue on issues that are important to organizations and individuals. While we enjoy sharing our ideas and insights, we’re especially interested in what you may have to say. If you have a question or a comment about this article – or any article from the Our Thoughts On blog – we hope you’ll share it with us. After all, a dialogue is an exchange of ideas, and we’d like to hear from you. Email us at [email protected].

Material discussed is meant for informational purposes only, and it is not to be construed as investment, tax, or legal advice. Please note that individual situations can vary. Therefore, this information should be relied upon when coordinated with individual professional advice.

© 2021 Schneider Downs. All rights-reserved. All content on this site is property of Schneider Downs unless otherwise noted and should not be used without written permission.

our thoughts on
Ohio Update on the Unemployment Benefits Exclusion for Taxpayers Who Filed Prior to the Enactment of the American Rescue Plan Act
Ohio Sales Tax Holiday 2021
Florida Enacts Sales and Use Tax Economic Nexus
Nonresident Taxpayers May Be Eligible for Refunds of Ohio Tax for Gain on the Sale of a Business Interest
Is Your Association Required to File a Pennsylvania Decennial Report?
State and Local Tax Update for Q4 of 2020
Register to receive our weekly newsletter with our most recent columns and insights.
Have a question? Ask us!

We’d love to hear from you. Drop us a note, and we’ll respond to you as quickly as possible.

Ask us
contact us
Map of Pittsburgh Office

One PPG Place, Suite 1700
Pittsburgh, PA 15222

[email protected]
p:412.261.3644     f:412.261.4876

Map of Columbus Office

65 East State Street, Suite 2000
Columbus, OH 43215

[email protected]
p:614.621.4060     f:614.621.4062

Map of Washington Office
Washington, D.C.

1660 International Drive, Suite 600
McLean, VA 22102

[email protected]

This site uses cookies to ensure that we give you the best user experience. Cookies assist in navigation, analyzing traffic and in our marketing efforts as described in our Privacy Policy.