New Pennsylvania Law on Payroll Debit Cards
The Pennsylvania Wage Payment and Collection Law (“WPCL”) provides that employees must be paid “in lawful money of the United States or check.” Until recently, Pennsylvania’s Department of Labor and Industry had not provided any administrative guidance as to whether payroll debit cards qualify as a lawful payment method under the WPCL.
On November 4, 2016, Governor Tom Wolf signed into law Act 161, which amends the Pennsylvania Banking Code and explicitly states that the use of payroll debit cards is permissible, subject to certain terms and conditions. These conditions include the following:
- Payment of wages by payroll debit cards cannot be mandatory and rather, must be optional for the employee;
- The employer must comply with strict notice requirements;
- The employee must be permitted one free withdrawal of wages each pay period and one in-network ATM withdrawal at least weekly;
- The employee must have the ability, without charge, to check the card’s balance electronically or by telephone; and
- There must be no fees associated with certain actions relating to the card, including issuance of the card, issuance of one replacement card per calendar year, transfer of wages to the card, or non-use of the card for a period of less than twelve months.
Act 161 also confirms that it supersedes any inconsistent provision in any other statute, rule, or regulation, thereby confirming that payment of wages with a payroll debit card in compliance with the Act’s requirements will comply with the WPCL. The use of payroll debit cards in a manner inconsistent with the requirements of Act 161 will violate Pennsylvania law.
This law took effect on May 4, 2017. Pennsylvania employers should review their current payroll debit card programs with legal counsel and confirm their programs comply with the new statute.