Can an Employer Require Direct Deposit in New York

February 17, 2022 Post a Comment

On September 7, 2016, the New York State Department of Labor published terminal regulations on the methods by which employees must exist paid, including with respect to direct deposit of wages and payroll debit cards. The regulations get effective on March vii, 2017.

Direct Deposit

New York offset legislated the method of payment of wages in the tardily 1800s, when it required that wages exist paid in cash and (for transmission workers) weekly. For decades, New York has immune employers to pay wages by direct deposit, but simply with employee consent. (Labor Law 192(ane) currently states that "[n]o employer shall without the accelerate written consent of any employee directly pay or eolith the net wage or bacon of such employee in a bank or other financial institution.") Consent is not required from individuals employed in a bona fide executive, administrative, or professional capacity whose earnings are in backlog of $900 a week.

The new regulations require employers to provide a written discover of rights (discussed below) and to receive written consent from employees before paying wages by direct eolith, and such consent "must be maintained by the employer during the period of the employee's employment and for six years following the last payment of wages by straight eolith." Employers must provide employees with a copy of the written consent, and employees may select the financial institution to which such direct deposit is fabricated. Employees have the right to revoke the consent. As in the Labor Law, the rules do not apply to individuals employed in a bona fide executive, administrative, or professional person capacity whose earnings exceed $900 per week.

Payroll Debit Menu

A number of states now permit employers to pay wages via a debit menu, as an alternative to paying past check or cash. The rules around debit cards every bit a payroll tool are continuing to evolve nationally.

New York's new rules regarding employers' utilize of payroll debit cards are among the country'southward nigh comprehensive. Employers that wish to implement a payroll debit carte du jour program must have steps to limit the barriers, including financial and geographical barriers, to employees accessing their total wages free and articulate. Amid other requirements, the rules:

require employers to provide employees with a written notice of rights (discussed below) and to obtain written consent from employees at least seven business days prior to initiating whatever payment of wages past payroll debit menu;
bar employers or payroll debit card providers from charging employees fees for using payroll debit cards or for accessing related services, such as those for telephone or online customer service, startup, maintenance, overdraft, inactivity, balance inquiries, and account endmost;
require that employers ensure that employees take local access to at least one no-fee automated teller machine located within "a reasonable travel distance" (an undefined term that is left for employers and the NYSDOL to interpret) from where they alive or work;
mandate that at to the lowest degree one method is bachelor for employees to withdraw upward to the total amount of wages for each pay menstruum or any remaining residue on the payroll debit card without incurring a fee;
require that funds on a payroll debit menu may not expire, although an account may be closed for inactivity with reasonable notice to the employee and return of any remaining funds with seven days;
prohibit the use of a payroll debit card account that is linked to any form of credit, including a loan confronting future pay or a greenbacks advance on future pay; and
prevent employers from passing on costs associated with a payroll debit menu business relationship to employees or receiving kickbacks or financial remuneration from the issuer, card sponsor, or any 3rd party that delivers wages via payroll cards.

Written Notice and Consent

The regulations require that employers that use methods of payments other than cash or check provide employees with written notice that includes:

a plain linguistic communication description of all options for receiving wages;
a argument that the employer may not crave employees to take wages by either payroll debit menu or straight deposit;
a statement that employees may not be charged whatever services fees to access their wages in full; and
if offering employees the option to receive payment via payroll debit carte, a list of locations, within reasonable proximity to employees' place of residence or identify of work, where employees may admission and withdraw wages at no charge.

Written notice and consent may be provided and obtained electronically, so long as an employee is notified of the opportunity to print a copy of the detect and consent for complimentary in the workplace. Employees must be allowed to withdraw their consent at any time, though employers are given a reasonable time (no longer than two full pay periods) to finalize any changes to the payment method.

Employees' informed written consent to receive wages past straight eolith or payroll debit bill of fare may not be obtained with intimidation, coercion, or fear of adverse action for refusing to accept payment of wages by such methods. In addition, payment of wages by either straight deposit or payroll debit card may not be a status of rent or of continued employment.

Tags: New and Proposed Laws and Legislation, Payroll, wage and hour

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