AB687: Bill Text

LRB-3226/1

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2013 - 2014 LEGISLATURE

2013 Assembly BILL 687

January 30, 2014 - Introduced by Representatives Ohnstad, Barnes, Johnson, Kahl, Sargent, T. Larson, Mason, Goyke, Bewley, Shankland, Bernard Schaber, Bernier, Pope, Berceau, Ringhand, Genrich, Kessler, C. Taylor, Sinicki, Krug, Richards and Kolste, cosponsored by Senators Harris, Wirch, Lehman, L. Taylor and C. Larson. Referred to Committee on Labor.

AB687,1,3 An Act to amend 109.09 (1), 111.322 (2m) (a) and 111.322 (2m) (b); and to create 103.453 and 106.54 (10) of the statutes; relating to: payment of wages by electronic fund transfer to a payroll card account.

Analysis by the Legislative Reference Bureau

Current law

Under current law, if an employer pays wages in a form other than cash, the wages must be payable at the employer's office, if within the state, at any bank within the state, or at a place of business within the county in which the work was performed.

The bill

Payment of wages by payroll card. This bill regulates the payment of wages in the form of an electronic fund transfer to a payroll card account, which under current regulations issued under the federal Electronic Fund Transfer Act, is defined as an account that is directly or indirectly established through an employer and to which electronic fund transfers of the consumer's wages, salary, or other employee compensation (such as commissions) are made on a recurring basis, whether the account is operated or managed by the employer, a third-party payroll processor, a depository institution, or any other person (payment of wages by payroll card).

Employee consent required. Specifically, the bill prohibits an employer from paying an employee his or her wages by payroll card unless all of the following apply:

1. The employer obtains the employee's consent to receive his or her wages by payroll card. That consent must be given knowingly and voluntarily and not as a condition of employment, must be given before the performance of the work for which the employee is receiving wages, and must be affirmed by a written or otherwise verifiable record maintained by the employer.

2. The employer also offers the employee the option of receiving his or her wages in cash, in the form of a check, or by means of direct deposit to a depository account of the employee's choosing.

Disclosure requirements. Before an employer may seek the consent of an employee to receive his or her wages by payroll card, the employer must provide all of the following information to the employee:

1. A plain-language description of the employee's options for receiving his or her wages.

2. A statement of the terms and conditions governing the employer's payment of wages by payroll card and the employee's use of a payroll card to access those wages. That statement must include a clear, conspicuous, and easily understandable list of all fees that may be charged to the employee and the amount of those fees.

Fees. Under the bill, an employer may not pay an employee his or her wages by payroll card unless the employer, if the employer itself issues payroll cards to its employees, or a third-party processor, depository institution, or other person contracted by the employer to issue those cards (payroll card issuer) does all of the following:

1. Permits the employee to make at least two withdrawals per pay period at no cost to the employee from an automated teller machine in a network designated by the payroll card issuer, unless the employee's pay period is weekly, in which case the payroll card issuer may permit the employee to make only one such withdrawal per pay period at no cost to the employee.

2. Provides at least one method by which the employee may withdraw his or her entire wages for each pay period at no cost to the employee.

The bill permits a payroll card issuer to charge a reasonable fee for any discretionary or optional service that the issuer provides to an employee, except that a payroll card issuer may not charge an employee a fee for any of the following: 1) establishing or maintaining a payroll card account or obtaining or holding a payroll card; 2) a point-of-sale transaction or any other ordinary transaction; 3) a low balance in the employee's payroll card account; 4) a declined transaction. ; 5) inactivity or dormancy in the employee's payroll card account; 6) o ne replacement payroll card issued in each calendar year; or 7) c losing a payroll card account or issuing payment of the remaining balance in a payroll card account by check or any other means.

Provision of account information. The bill requires a payroll card issuer to provide all of the following at no cost to an employee:

1. On the employee's one-time written or oral request, a monthly statement specifying all deposits to, withdrawals from, fees charged to, and other transactions involving the employee's payroll card account since the date of the last monthly statement.

2. Two telephone calls from the employee to a live customer service representative of the payroll card issuer during each pay period.

3. Access to balance or other account information by way of an automated telephone system and not less than one additional automated option.

No link to credit. The bill prohibits an employer or other payroll card issuer from linking a payroll card account to any form of credit, including a loan against future pay, a cash advance on future pay, or any fee-based overdraft protection program, except that the bill does not prohibit a payroll card issuer from covering an occasional inadvertent overdraft transaction if there is no charge to the employee.

Change in method of wage payment. The bill permits an employee who is receiving his or her wages by payroll card to request his or her employer to change the method by which the employee receives those wages at any time and requires the employer to honor such a request.

Insured accounts required. Finally, the bill permits an employer to pay an employee his or her wages by payroll card only if the employee's payroll card account is insured by the Federal Deposit Insurance Corporation or the National Credit Union Administration.

For further information see the state and local fiscal estimate, which will be printed as an appendix to this bill.

The people of the state of Wisconsin, represented in senate and assembly, do enact as follows:

AB687,1 Section 1. 103.453 of the statutes is created to read:

AB687,3,2 103.453 Payroll cards. (1) Definitions. In this section:

AB687,3,3 (a) "Automated teller machine" has the meaning given in s. 134.85 (1) (a).

AB687,3,5 (b) "Payroll card" means a prepaid card or any other code or device through which an employer provides an employee with access to his or her wages.

AB687,3,6 (c) "Payroll card account" has the meaning given in 12 CFR 205.2 (b) 2.

AB687,3,11 (d) "Payroll card issuer" means an employer that operates and manages the payroll card accounts of its employees and that issues payroll cards to those employees or a third-party payroll processor, depository institution, or any other person contracted by an employer to operate and manage those accounts and to issue those cards.

AB687,3,12 (e) "Wages" has the meaning given in s. 109.01 (3).

AB687,4,3 (2) Consent required. An employer may not pay an employee his or her wages in the form of an electronic fund transfer to a payroll card account unless all of the following apply:

AB687,4,10 (a) The employer, after providing the information specified in sub. (3) to the employee, obtains the employee's consent to receive his or her wages in the form of an electronic fund transfer to a payroll card account. That consent must be given knowingly and voluntarily and not as a condition of employment, must be given before the performance of the work for which the employee is receiving wages, and must be affirmed by a written or otherwise verifiable record maintained by the employer in accordance with s. 104.09.

AB687,4,13 (b) The employer also offers the employee the option of receiving his or her wages in cash, in the form of a time check or other paper under s. 103.45, or by means of direct deposit to a depository account of the employee's choosing.

AB687,4,16 (3) Disclosure. (a) Before an employer may seek the consent of an employee to receive his or her wages in the form of an electronic fund transfer to a payroll card account, the employer shall provide all of the following information to the employee:

AB687,4,18 1. A plain-language description of the employee's options under sub. (2) (a) and (b) for receiving wages.

AB687,4,23 2. A statement of the terms and conditions governing the employer's payment of wages in the form of an electronic fund transfer to a payroll card account and the employee's use of a payroll card to access those wages. That statement shall include a clear, conspicuous, and easily understandable list of all fees that may be charged to the employee by the payroll card issuer and the amount of those fees.

AB687,5,3 (b) The employer shall provide the information specified in par. (a) in the language that the employer normally uses to communicate employment-related information to the employee.

AB687,5,6 (4) Fees. (a) An employer may not pay an employee his or her wages in the form of an electronic fund transfer to a payroll card account unless the payroll card issuer does all of the following:

AB687,5,11 1. Permits the employee to make at least 2 withdrawals per pay period at no cost to the employee from an automated teller machine in a network designated by the payroll card issuer, unless the employee's pay period is weekly, in which case the payroll card issuer may permit the employee to make only one such withdrawal per pay period at no cost to the employee.

AB687,5,13 2. Provides at least one method by which the employee may withdraw his or her entire wages for each pay period at no cost to the employee.

AB687,5,15 (b) Except as provided in par. (c), a payroll card issuer may charge a reasonable fee for any discretionary or optional service that the issuer provides to an employee.

AB687,5,17 (c) A payroll card issuer may not charge an employee a fee for any of the following: