The Texas governor recently signed into law Texas House Bill 2240. The mercifully short bill authorizes payment of wages via payroll cards, places reasonable fee disclosure obligations on the employer, and gives employees the right to opt-out of receiving their wages via payroll cards.
While payroll cards are permissible methods for paying wages in every state, payroll cards are not expressly recognized by every state’s wage payment laws. In those states where the statutes are silent, employers and payroll card providers are left applying somewhat loose-fitting direct deposit regulations to payroll cards.
The new law (which goes into effect September 1) goes beyond just explicitly authorizing payroll cards as a permissible wage payment method, though. Employers will be able to default employees into receiving wages via payroll cards. Employees will retain the right to opt-out to an alternate form of payment, but defaulting employees promises to increase adoption of electronic receipt of wages, saving costs for employers and making payment of wages easier and more reliable.
The team here at Payrollcardlaw.com is pleased to see the developments in Georgia and now in Texas. While the legislative sessions in most states are coming to a close, we expect to stay busy this summer as the litigation in New York slogs on. And while we’re closely monitoring the payroll card landscape, we’ll let you know if we see something noteworthy. Until then, check out the blog and, if you haven’t already, subscribe to receive updates.