Pennsylvania Employers May Legally Pay Employees’ Wages via Payroll Debit Cards

By: Heather S. Heidelbaugh, Esq. and Sally Griffith Cimini, Esq.

On November 4, 2016, Pennsylvania Governor Tom Wolf signed into law Senate Bill 1265 (the “Bill”), confirming that Pennsylvania employers may legally pay their employees’ wages via payroll debit card and providing additional protections to employees who elect to receive their wages in that manner. The Bill takes effect in May 2017.

The Bill resolves the uncertainty surrounding payroll debit cards, and whether they comply with the Pennsylvania’s Wage Payment Collection Law (‘WPCL”)’s method provision. Specifically, the WPCL’s method provision mandates that “wages shall be paid in lawful money of the United States or check.”

The new Bill resolves that uncertainty. Under the new law, the use of payroll debit cards is permitted, if certain prerequisites are met.

Among other things, the Bill provides that:

• Acceptance of payment by payroll debit card is voluntary and cannot be required of any employee as a condition of employment;
• Employees cannot be charged fees for weekly withdrawals (including ATM withdrawals), for balance inquiries, for the initiation of the payroll card program, for the issuance of the initial payroll card and one replacement card per year, for the transfer of wages or other payments from the employer to the payroll card account, for point-of-sale purchase transactions, or for account inactivity of less than 12 months; and
• Funds deposited in a payroll debit account can never expire.

You can read a full copy of the Bill, here. Senate Bill 1265 takes effect in May 2017.  Companies that offer payment of wages via payroll debit card will need to ensure that their payroll card programs comply with all provisions of Senate Bill 1265 by that date.

Since payment by payroll debit card cannot be mandated by employers, Leech Tishman strongly recommends that employers obtain a signed authorization form from any employee who consents to payment by payroll debit card or direct deposit.

If you have any questions regarding Payroll Debit Cards, the new Bill, or how it will affect your business, please contact Heather Heidelbaugh or Sally Griffith Cimini. Heather can be reached at 412.880.5607, or by email at hheidelbaugh@leechtishman.com. Sally can be reached at 412.880-5610, or by email at scimini@leechtishman.com.

 About the Authors

Heather S. Heidelbaugh is a Partner with Leech Tishman and a member of the Litigation Practice Group. An experienced trial lawyer, Heather is based in Leech Tishman’s Pittsburgh office and has handled a wide variety of litigation matters for businesses and individuals. Heather focuses her practice on all types of litigation. She is a member of the Academy of Trial Lawyers and the Litigation Counsel of America, a national legal honorary society. 

Sally Griffith Cimini is a Partner with Leech Tishman and chairs the Employment Practice Group.  Sally is based in Leech’s Tishman’s Pittsburgh office.  She has over 30 years of experience counseling and litigating on behalf of private and public sector employers in all aspects of the employment relationship, from hiring through termination. She regularly advises clients on wage and hour issues as well as human resources policies and practices.  Sally is a Fellow of the American College of Labor and Employment Lawyers and has for many years been recognized by Best Lawyers in America, Best Lawyers in Pittsburgh and Pennsylvania Superlawyers.

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Leech Tishman Fuscaldo & Lampl is a full-service law firm dedicated to assisting individuals, businesses, and institutions. Leech Tishman offers legal services in alternative dispute resolution, bankruptcy & creditors’ rights, construction, corporate, employee benefits, employment, energy, environmental, health & safety, estates & trusts, family law, government relations, immigration, insurance coverage & corporate risk mitigation, intellectual property, international legal matters, litigation, real estate, and taxation. Headquartered in Pittsburgh, PA, Leech Tishman also has offices in Chicago, Los Angeles, New York and Wilmington, DE.