State Court Upholds New York Payroll Card Regulations Yet Again

Game of Thrones may be ending soon, but the drama in New York over the Department of Labor’s (“NYDOL”) payroll card regulations has been renewed for another season. In the most recent episode, the trial court reconsidered its prior decision reinstating the payroll card rules but again ruled in favor of the NYDOL.

Subscribers of the 50 State Payroll Card Law Blog should be well-acquainted with the saga of the New York payroll card regulations, but for our readers who can’t remember the intricacies of the plot, here’s a refresher:

September 2016 The NY DOL issued regulations regarding the methods of wage payment, which included provisions regulating the use of payroll cards.  
October 2016 Global Cash Card (“GCC”) challenges the rules before the Industrial Board of Appeals (the “Board”)  
February 2017 The Board sided with GCC and revoked the rules.  
April 2017 The NY DOL petitioned a New York court to review the Board’s revocation.  
May 2018 The court annulled the Board’s revocation, relying in part on documents that were not part of the administrative record, concluding that the Board’s determination was arbitrary and capricious.  
October 2018 At GCC’s request, the Court agreed to reconsider its order.

On February 20, 2019, the Court issued a new opinion, which again ruled in NYDOL’s favor, upholding the regulations. The court held that the Board acted arbitrarily and capriciously by revoking the entirety of NYDOL’s rule instead of just revoking the provisions addressing payroll cards that had been challenged. GCC had unsuccessfully argued that the Board had only revoked the challenged portion of the rule.

The story isn’t over yet, though. GCC recently appealed the decision, arguing that the lower court got it wrong and that the Board clearly intended only to revoke the payroll portions of the proposed regulations. The NYDOL has until June to file its response and we anticipate the appeal will continue for the rest of the year. Let’s hope we get a final decision on New York payroll card rules before the Night King enslaves us all.

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