Late last year, the Pennsylvania Supreme Court ruled (Siciliano v. Mueller) that an employer requiring employees to accept payment of wages via payroll debit card is unlawful and violated the state’s Wage Payment Collection Law. (see our previous article “Mandatory Payroll Debit Cards Unlawful in Pennsylvania”)
In an effort to modernize the Pennsylvania Wage Payment and Collection Law, Pennsylvania governor Tom Wolf signed Act 161 into law. This law reverses the Court’s decision in Siciliano and expressly permits employers to pay employees using payroll debit cards – provided that the following conditions are met:
- Employees must be given the option of receiving their wages via paper checks or direct deposit if they prefer;
- Employees must be properly notified (in writing or electronically) of their wage payment options and of the terms and conditions of the payroll card account option, including:
- The fees that may be deducted from the employee’s payroll card account by the card issuer,
- A notice that third parties may assess fees in addition to the fees assessed by the card issuer,
- The methods available to the employee for accessing wages without fees.
- Employees must affirmatively authorize use of the card;
- The card must allow one free withdrawal each pay period and one in-network ATM withdrawal at least weekly;
- The employee must have the ability to check the card’s balance electronically or via telephone without cost; and
- There must be no fees associated with the issuance, replacement (one per year), transfer of wages, or non-use (for up to twelve months) of the card.
- Employees must be given the opportunity to request (either in writing or electronically) to change the employee’s method of receiving wages from a payroll card account to direct deposit or negotiable check.
- The change must take effect as soon as practicable, but no later than the first payday after 14 days from receipt by the employer of the employee’s request and any information necessary to implement the change.
- Employees must be provided with written or electronic statement of earnings and deductions each pay period in accordance with Pennsylvania law.
Employers seeking to pay employees via payroll debit cards should review the new law to ensure compliance.