Finally, some good news when it comes to payroll card legislation! While we’re waiting with breathless anticipation to see what happens with the litigation in New York, the legislation in New York, and the other piece of legislation in New York, Georgia and Texas legislatures are considering bills that would make it easier for employers to pay their workers electronically.
As it stands right now, Georgia’s wage payment statute does not permit employers to mandate electronic receipt of wages. While employers may default employees to payroll cards, employees may opt-out to their choice of direct deposit or check. House Bill 110 would amend the wage payment statute to remove this opt-out right. Because Reg. E requires employers to offer employees the option of direct deposit to a financial institution of their choice, the Georgia bill effectively allows employers to mandate electronic pay by defaulting employees to payroll cards with the option to elect direct deposit.
While Texas doesn’t have any statutory or regulatory provisions specifically addressing payroll cards, its Labor Code allows employers to pay wages by electronic transfer of funds and “in another form” if agreed to by the employee. House Bill 2240 and its companion bill, Senate Bill 1485, would explicitly authorize employers to pay wages via payroll card and allow employers to default employees to a card unless they elect another form of payment. This bill would allow employers to get close to 100% electronic pay.
The Texas and Georgia bills are obviously good news for employers because it’s easier and cheaper to pay employees electronically. They are also good news for employees because electronic wage payment provides workers with a higher level of safety and convenience than paper checks. Look back to Hurricane Harvey and the destruction that it brought to Houston and other parts of Texas. Businesses hit by more than four feet of rainfall faced immense challenges in delivering paper checks. Mother Nature also created significant obstacles for employees trying to locate and then cash their paper checks. Electronic payments, however, were delivered on time and with minimal interruption.
We’ll track the Texas and Georgia bills on our 50 State Payroll Card Compliance Map. Be sure to subscribe to updates and we’ll let you know about the latest developments on these bills and other legislation affecting payroll cards.