On June 3, 2011 Rep. Joe Baca (D-CA) introduced legislation that would mandate certain disclosures to and options for employees who receive their pay electronically through payroll cards. The Electronic Paycard Protection Act (H.R. 2125) would add a section to the Fair Labor Standards Act (FLSA) that outlines the new conditions imposed on an employer that uses electronic payroll cards, defined in the Act as “an access mechanism, including a prepaid card, code, or device, issued to an employee by an employer, or other entity by arrangement with the employer, through which an employer provides an employee access to his or her wages.”

The measure would accomplish the following, among other things:

• Allow employees to access the full amount of their wages at least once per pay period;
• Provide employees with a mechanism to check their balance free of charge;
• Provide employees with a written explanation of all the terms and conditions associated with the use of an electronic payroll card, including any fees associated with such a card. Employers would also be required to make these disclosures in any other manner typically used by the employer to communicate to employees;
• Give employees the option to receive either a paper paycheck or electronic paycheck deposit instead of a paycard;
• Disallow an electronic paycard payment of an employee’s final payment or any severance payment to an employee whose employment has been discontinued;
• Prevent an employer from firing or failing to hire employees or applicants for refusing to use electronic paycards as their primary means of receiving wages; and
• Ensure that any funds made available by the paycard may not expire.

In a statement, Rep. Baca claimed: “As the number of employers that utilize electronic paycards to distribute wages continues to grow, it is critical we put in place the proper protections necessary to ensure all employees receive the wages they deserve in a fair and efficient manner,” adding, “My bill ensures that employers who use paycards meet their responsibilities, and apprise their workers of both the benefits and risks that go along with using these cards.”

Photo credit: Kryu