Changes Will Better Guard Workers’ Wages against Predatory Practices
NEW YORK STATE (June 7, 2015) – Governor Andrew M. Cuomo has announced that the state Department of Labor has published draft regulations to better manage how businesses pay workers with debit cards, in order to help protect workers’ wages. The proposed regulations, which appear today in the State Register, outline the responsibilities of businesses that use debit cards to pay workers and prohibit employers from profiting from or passing along costs to the employee. An estimated 13,000 businesses in New York State pay approximately 200,000 workers through debit cards.
“An honest day’s pay for an honest day’s work should never come with an asterisk,” Governor Cuomo said. “These regulations crack down on one of the more underhanded forms of wage theft and will better protect hundreds of thousands of employees who work and live in New York.”
Until now, payroll debit cards have not been as regulated as other payment methods like cash, check and direct deposit. Under the new regulations, payment through a debit card would require advance consent, which businesses must document and keep on record for six years.
The proposed changes would require employers to notify employees about local locations where they can access their wages for free. Employers would also be required to provide unlimited free ATM withdrawals within a local network and a method to withdraw the full amount of wages each pay period.
“These regulations will protect low-income workers, many of whom don’t have bank accounts and are therefore more susceptible to predatory fees,” said Department of Labor Acting Commissioner Mario J. Musolino. “We have drafted these regulations to ensure a balance between convenience and cost-prohibitive fees. Workers should not be cheated out of the wages they have earned and should be able to access them at no charge through a network of local ATMs.”
Common fees like those for customer service, account maintenance, overdraft and inactivity are expressly prohibited by the new rules.
The regulations will take effect following a 45-day notice and comment period.
All employers in New York State are required to give employees a wage statement or pay stub each payday. They are also required to maintain records of how long each employee works, the rate or rates of pay, how each employee is paid, itemized deductions and credits claimed by the employer (i.e., tip, meal and lodging allowances).
For questions about wages or other labor standards issues, or to file a complaint, call: 888-4-NYSDOL.