Connecticut Seal

General Assembly

 

Raised Bill No. 908

January Session, 2015

 

LCO No. 3451

 

*03451_______LAB*

Referred to Committee on LABOR AND PUBLIC EMPLOYEES

 

Introduced by:

 

(LAB)

 

AN ACT ALLOWING EMPLOYERS TO PAY WAGES USING PAYROLL CARDS.

Be it enacted by the Senate and House of Representatives in General Assembly convened:

Section 1. (NEW) (Effective October 1, 2015) (a) As used in this section:

(1) "Direct deposit" means the electronic payment of an employee's wages, salary or other compensation by credit to such employee's account in any bank, Connecticut credit union or federal credit union that has agreed with the employer to accept such wages, salary or other compensation;

(2) "Payroll card" means a stored value card or other device used by an employee to access wages from a payroll card account. Payroll card does not mean a gift certificate, as defined in section 3-56a of the general statutes; and

(3) "Payroll card account" means an account in any bank, Connecticut credit union or federal credit union that is directly or indirectly established through an employer to which transfers of the employee's wages, salary or other compensation are made and accessed through the use of a payroll card.

(b) An employer may offer the use of payroll cards to deliver wages, salary or other compensation to employees, provided each employee is given a form that notifies the employee, in clear and conspicuous language, that:

(1) The employee has the option of receiving wages, salary or other compensation through any means allowed pursuant to section 31-71b of the general statutes, as amended by this act; and

(2) Failure to notify the employer of the employee's option of receiving such wages, salary or compensation within two weeks of receiving the form will be considered consent to receiving wages, salary or other compensation through a payroll card.

(c) Each employee with a payroll card shall be allowed to make at least one withdrawal or transfer each pay period without charge for any amount up to and including the full amount of the employee's wages, salary or compensation for that pay period.

(d) (1) Neither the employer nor the payroll card issuer shall deduct a fee from the wages, salary or other compensation on an employee's payroll card or in an employee's payroll card account for: (A) Issuing a payroll card; (B) transferring wages, salary or other compensation onto the payroll card; (C) maintaining a payroll card account; (D) providing one replacement card per calendar year upon the employee's request; (E) closing the payroll card account; (F) low balance or declined transactions; (G) inactivity or dormancy of the payroll card account; or (H) other similar costs for the maintenance or use of a payroll card account, during the employee's period of employment with the employer and for sixty days after the employee's employment with the employer has been terminated by either party.

(2) A payroll card may bear an expiration date, provided (A) the funds on the card do not expire, and (B) prior to the expiration date, the employee is provided a replacement card, without charge, during the employee's employment with the employer and for sixty days after the termination of such employment with the employer.

(e) Each employer shall provide the employee a means of checking his or her account balance through an automated telephone system and electronically without cost to the employee.

(f) Each employer using payroll cards to deliver wages, salary or other compensation to an employee, shall provide such employee with clear and conspicuous notice, in writing, and in the language the employer normally uses to communicate employment-related polices to his or her employees, of the following items:

(1) The terms and conditions relating to the use of the payroll card, including a list of fees that may be assessed by the card issuer;

(2) The methods available to employees for accessing their full wages, salaries or other compensation in lawful money of the United States without any transaction fee to the employee for such access;

(3) The methods available to employees for checking their balances in the payroll card account without cost; and

(4) A statement as to whether third parties may assess additional fees.

(g) Neither the payroll card nor the payroll card account shall be linked to any form of credit and, to the extent technologically feasible, the payroll card account shall not allow for overdrafts. No fees or interest may be imposed upon the employee for an overdraft or a declined transaction.

(h) The employer shall furnish the employee with a statement of deductions made from his or her wages, salary or other compensation for each pay period in accordance with section 31-13a of the general statutes, as amended by this act.

(i) Each employee with a payroll card shall be permitted, on timely notice to the employer and without cost or fear of reprisal or discrimination or the assessment of any penalty, to receive his or her wages, salary or other compensation by direct deposit into a personal account at any bank, Connecticut credit union or federal credit union that has agreed with the employer to accept such deposits. The employer shall begin payment by direct deposit not later than fourteen days after receiving both the employee's request and the account information necessary to make the deposit.

(j) Each employee with a payroll card shall be provided with annual notice of the terms and conditions relating to the use of the payroll card, including the current schedule of fees. This requirement may be satisfied by (1) electronic notice to the address at which the employer regularly communicates other types of employment information to the employee, (2) mailing notice to the employee at his or her last-known mailing address, (3) distributing the notice directly to the employee in the employer's place of business, or (4) through other means used by the employer to distribute employment-related information and notices individually to employees.

(k) Each employer shall provide written notice to each employee holding a payroll card of any change in a term or condition of such payroll card not later than thirty days prior to the effective date of such change.

(l) Each employee with a payroll card shall have access to a history of his or her payroll card account transactions spanning a period of not less than sixty days prior to the date the employee accesses such history. The employer shall provide employees with either (1) a confidential means of accessing such information electronically, along with the ability to print the transaction history without cost, or (2) a means for the employee to receive a written transaction history once a month from the card issuer without cost.

(m) Wages, salary or other compensation paid to an employee using a payroll card shall be deposited in a payroll card account that is insured by the Federal Deposit Insurance Corporation or the National Credit Union Administration.

(n) A payroll card account that is used to receive only employee wages, salary or other compensation shall be exempt from execution under section 52-367b of the general statutes in accordance with subsection (f) of section 52-361a of the general statutes.

(o) Nothing in this section shall be construed to restrict the fees that a payroll card issuer may charge the employer pursuant to a payroll card agreement between the payroll card issuer and the employer, provided those fees are not charged to or passed onto any employee.

Sec. 2. Subsection (a) of section 31-71b of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2015):

(a) (1) Except as provided in subdivision (2) of this subsection, each employer, or the agent or representative of an employer, shall pay weekly all [moneys] wages, salary or other compensation due each employee on a regular pay day, designated in advance by the employer [, in] using one or more of the following methods: (A) cash, (B) by negotiable checks, [or, upon an employee's written request, by credit to such employee's account in any bank that has agreed with the employer to accept such wage deposits] (C) by direct deposit, or (D) by payroll card, provided the requirements of section 1 of this act are satisfied.

(2) Unless otherwise requested by the recipient, the Comptroller shall, as soon as is practicable, pay all wages due each state employee, as defined in section 5-196, by electronic direct deposit to such employee's account in any bank, Connecticut credit union or federal credit union that has agreed with the Comptroller to accept such wage deposits.

Sec. 3. Section 31-13a of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2015):

(a) With each wage payment each employer shall furnish to each employee, in writing or electronically, a record of hours worked, the gross earnings showing straight time and overtime as separate entries, itemized deductions and net earnings, except that the furnishing of a record of hours worked and the separation of straight time and overtime earnings shall not apply in the case of any employee with respect to whom the employer is specifically exempt from the keeping of time records and the payment of overtime under the Connecticut Minimum Wage Act or the Fair Labor Standards Act.

(b) If the record of hours is furnished electronically pursuant to subsection (a) of this section, the employer shall provide a means for each employee to securely, privately and conveniently access and print such record. Any information contained in the record furnished electronically pursuant to subsection (a) of this section shall incorporate safeguards to ensure the confidentiality of an employee's personal information.

This act shall take effect as follows and shall amend the following sections:

Section 1

October 1, 2015

New section

Sec. 2

October 1, 2015

31-71b(a)

Sec. 3

October 1, 2015

31-13a

Statement of Purpose:

To allow employers to pay employee wages using payroll cards, and to allow certain wage and hour information provided by an employer to employees be delivered electronically provided certain conditions are met.

[Proposed deletions are enclosed in brackets. Proposed additions are indicated by underline, except that when the entire text of a bill or resolution or a section of a bill or resolution is new, it is not underlined.]