On September 7th, the NYS Department of Labor issued final regulations governing the use of payroll debit cards.  Importantly, the rule also impacts the ongoing use of paychecks and direct deposit - provisions that will apply to all employers in New York State effective March 7, 2017.

For use of paychecks, the rule requires that checks be a "negotiable instrument" (pay checks drawn on a bank should already meet this standard) and prohibits the employer from imposing any fees on employees in connection with the use of paychecks, including for the issuance of a replacement for a lost or stolen check.

For use of direct deposit, Labor Law §192 already required advance written consent of employees and deposit in a financial institution of the employee's choosing. In addition, under the new rule, employers using either direct deposit or payroll debit cards must, by March 7, 2017, provide all employees with written notice:
- listing all of the pay options offered to the employee by the employer (employers are not required to offer
either the direct deposit or payroll debit card option.)
- stating that the employer cannot require employees to accept wages by direct deposit or payroll debit
card.
- stating that the employee cannot be charged any fees by the employer for accessing their wages in full.
Importantly, for employers with employees already using direct deposit, the Labor Department has indicated that
employee consents provided prior to the effective date of this rule will remain in effect if the employer provides all
employees with the notice described above prior to 3/7/17. The Department has committed to issuing templates
for use by employers containing all the information necessary for compliance with this notice requirement.

The rules for use of payroll debit cards are far more detailed. Employers who use payroll debit cards need to become familiar with the details of the new rule. They include, but are not limited to:
- obtaining employee consent at least 7 days prior to payment of wages by payroll debit card;
- providing employee access to ATM machines in close proximity to employee's place of employment or
residence that offer withdrawals up to the total amount of the wages at no cost to the employee, as well as
"one method to withdraw the total amount of wages for each pay period" without fee; and
- a prohibition on any charges to employees for a range of services, if offered, including applications, point
of sale transactions, account inactivity, on-line balance information access, and others.
- In cases where employees are covered by a valid collective bargaining unit, employers must have the
approval of the union before paying by payroll debit card.
For additional details, visit the website.