§388-5.7 Payment of wages by pay cards. (a) Notwithstanding section 388-2, an employer shall not pay wages due to the employer's employees by use of a pay card unless the following requirements are satisfied:
(1) The employee shall be given the option of receiving the employee's wages by direct deposit to a depository account of the employee's choosing, receiving payment by paper check, or receiving payment by pay card before the employee selects direct deposit, pay card, or paper check;
(2) The employer shall not mandate an employee's use of a pay card;
(3) The employer shall not make participation in the pay card program a condition of hire or continued employment;
(4) The employee shall voluntarily authorize the payment of wages using a pay card in writing or via electronic signature, without intimidation, coercion, or fear of discharge or reprisal for refusal to accept the pay card or pay card account;
(5) Prior to obtaining the employee's consent, the employer shall provide the employee in writing, in plain language in at least ten-point font:
(A) A description of the employee's options for receiving wages;
(B) The pay card fee schedule in a form that the employee may retain for the employee's records stating the dollar amount of all fees;
(C) A notice that states whether third parties may assess additional fees relating to the use of the pay card; and
(D) A list of the services available to the employee pursuant to paragraph (8);
(6) The employer shall be responsible for fees that have been assessed against the employee outside the pay card fee schedule;
(7) The employer shall agree to honor a written request by the employee to change the method of receiving wages from a pay card to another method offered by the employer within two pay periods from the time of the request;
(8) The pay card shall provide for all of the following, at no cost to the employee:
(A) A pay card on which the employee may receive wages, with no charges for the application, initiation, transfer, loading of wages by the employer, privilege of participation, or distribution or delivery of the initial pay card;
(B) The ability during each pay period for the employee to make at least three free withdrawals from the pay card, at least one of which permits withdrawal of the full amount of the employee's net wages on the card at a federally insured depository institution or at that institution's affiliated automated teller machines;
(C) The means to access the balance or other account information online and via telephone offered in conjunction with the pay card in a manner that allows access to account information twenty-four hours a day, seven days a week without charging a fee;
(D) A readily accessible electronic history of the employee's account transactions covering at least sixty days preceding the date the employee electronically accesses the account;
(E) Upon oral or written request or via electronic signature by the employee, a written history of the account transactions covering at least sixty days prior to the employee's request;
(F) No pay card shall assess an overdraft fee or charge pursuant to the pay card issuer's overdraft service against an employee or the employee's account; and
(G) The ability to close a pay card account and obtain payment of the balance remaining on the card;
(9) The pay card shall not impose fees based on an employee's account balance;
(10) The employer shall ensure that the pay card account provides one free replacement pay card per year at no cost to the employee at least fifteen days before the pay card's expiration date; provided that the replacement pay card need not be issued if the pay card has been inactive for a period of not less than twelve months or the employee is no longer employed by the employer;
(11) Pooled pay card accounts shall be permitted; provided that each subaccount shall be for the sole and exclusive benefit of the named employee, and not subject to the claims of the employer's creditors; provided further that each employee's pay card account shall be eligible for deposit insurance on a pass through basis, including:
(A) The account records of the federally insured depository institution shall disclose the existence of the agency or custodial relationship;
(B) The records of the federally insured depository institution, custodian, or other party shall disclose the identities of the employee cardholders who actually own the deposits and the amounts owned by each employee cardholder; and
(C) The funds in the account shall be owned by the individual employee cardholders under an agreement among the parties or pursuant to applicable law and shall not be used by the employer's creditor; and
(12) The funds in the pay card account shall not expire. The pay card account may be closed after six continuous months of inactivity, with reasonable notice to the employee; provided that the remaining funds in the pay card account shall be refunded to the employee at no cost to the employee.
(b) An employer shall deposit all wages owed to an employee, who has elected in writing or via electronic signature to receive the employee's wages through a pay card, into the employee's pay card account on or before the employee's designated payday. The employee shall be deemed to have been paid wages owed at the time the wages are deposited into the employee's pay card account and the employee has access to those wages. If there is any delay of an employee's access to wages due to an error by the issuer, the employer shall not be held liable for this delay; provided that the employer deposited the proper amount of wages into the account on or before the designated payday and the employer is in compliance with subsection (a).
(c) An employer shall be liable for any wages due and not timely paid onto a pay card pursuant to subsection (b).
(d) The employer shall provide twenty-one days prior written notice to any change to the pay card program taking effect. The written notice shall state in plain language in at least ten-point font any change to any of the terms and conditions of the pay card account, including any changes in the itemized list of fees.
(e) The employer shall comply with all applicable recordkeeping requirements under this chapter and section 387-6.
(f) The employer's obligation under this section shall cease sixty days after the employer-employee relationship ends and the employee has been paid the employee's final wages. [L 2014, c 208, §2]
Note
Section effective with the payroll period beginning on September 1, 2014. L 2014, c 208, §7(1).