New York Introduces Another Payroll Card Bill

Tom Kierner

We promise that our Payroll Card Compliance Map covers all fifty states. However, all the big news has been coming out of New York recently. Last week, we wrote about the introduction of Assembly Bill 88, which would legislatively affirm already existing regulatory obligations on employers to select payroll card programs that satisfy certain choice, consent, and wage access requirements.

Continuing the theme of “All New York, All the Time” is New York Senate Bill 832 (“SB 832”), which was filed on January 9. SB 832 would codify the majority of the requirements in the 2016 NY Department of Labor Wage Payment Rule. Notably absent from SB 832 are several of the more burdensome requirements that have troubled payroll card issuers and employers. SB 832 differs from the DOL regulations in the following ways:

  • No cooling off period. The Wage Payment Rule requires employee consent to be provided seven days before it becomes effective. SB 832 only requires that employees provide their consent.
  • More reasonable language requirements. The Wage Payment Rule requires that employers provide disclosures and obtain consent in the employee’s primary language or in a language the employee understands. SB 832 requires that employers provide disclosures in the language the employer normally uses to communicate employment policies.
  • Some differences on fee restrictions. The Wage Payment Rule prohibits eleven types of fees. SB 832 would, among other differences, allow inactivity fees after 9 months of cardholder inactivity and fees for declined ATM withdrawals.
  • Fewer disclosure requirements. The Wage Payment Rule mandates that employers provide a list of locations where employees can access and withdraw wages at no charge within a reasonable proximity to their place of residence or place of work. SB 832 has no such requirement.
  • A more clearly defined kickback prohibition. The Wage Payment Rule prohibits employers from receiving any financial remuneration from the issuer, card sponsor, or any third party for delivering wages via payroll card. While the Rule’s comments offered some additional clarification, SB 832 seems to simply prohibit kickbacks that vary based on employee utilization & fee revenue.
  • No change of terms requirement. The Wage Payment Rule requires that before any change in terms becomes effective, a notice must be provided to employees with 30 days’ notice. SB 832 does not contain such an obligation.

SB 832 still contains a majority of the consumer protections from the Wage Payment Rule, including requirements for employee consent, in-network ATM access, wage access, choice, fee restrictions, and program requirements.

So, what’s the deal with this bill? Does it signal that the legislature does not support the full extent of the DOL regulations? Or perhaps lawmakers are attempting to preserve some of the consumer protection provisions of the Wage Payment Rule in case Global Cash Card prevails in its legal challenge. If SB 832 passes and the Wage Payment Rule gets struck down, then SB 832 would serve as the sole source of law on payroll cards. If SB 832 passes and the Wage Payment Rule survives, presumably both (to the extent that the Wage Payment Rule doesn’t conflict with SB 832) will regulate employer wage payment behavior.

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