generalassemblyPayroll cards are finally here.

The General Assembly finished their regular session last night with several employment law bills getting passed, including some that have been kicking around for years.

One of them is Senate Bill 211, which authorizes employers to use payroll cards — instead of checks or direct deposit — to pay their employees.

But there are a number of conditions that must be met before this happens and there are a number of restrictions as well.  The bill will become effective October 1, 2016 — assuming the governor signs the measure, which is expected.

The Office of Legislative Research has done a thorough recap, which I’ll liberally borrow from here.

In order to use the card, an employee must “voluntarily and expressly authorize, in writing or electronically, that he or she wishes to be paid with a card without any intimidation, coercion, or fear of discharge or reprisal from the employer. No employer can require payment through a card as a condition of employment or for receiving any benefits or other type of remuneration.”

In addition, as noted by the OLR report:

  1. employers must give employees the option to be paid by check or through direct deposit,
  2. the card must be associated with an ATM network that ensures the availability of a substantial number of in-network ATMs in the state,
  3. employees must be able to make at least three free withdrawals per pay period, and
  4. none of the employer’s costs for using payroll cards can be passed on to employees.

Under the bill, a “payroll card” is a stored value card (similar to a bank account debit card) or other device, but not a gift certificate, that allows an employee to access wages from a payroll card account. The employee can choose to redeem it at multiple unaffiliated merchants or service providers, bank branches, or ATMs. A “payroll card account” is a bank or credit union account (1) established through an employer to transfer an employee’s wages, salary, or other compensation (pay); (2) accessed through a payroll card; and (3) subject to federal consumer protection regulations on electronic fund transfers.

Another big change, according to the OLR report: The bill also allows employers, regardless of how they pay their employees, to provide them with an electronic record of their hours worked, gross earnings, deductions, and net earnings (i.e., pay stub). To do so, the (1) employee must explicitly consent; (2) employer must provide a way for the employee to access and print the record securely, privately, and conveniently; and (3) employer must incorporate reasonable safeguards to protect the confidentiality of the employee’s personal information.

Lastly, current law allows employers to pay employees through direct deposit only on an employee’s written request. The bill allows an employee’s request for direct deposit to also be an electronic request.

An amendment, which also passed, (1) changes the timeframe in which an employer must switch an employee from a payroll card to direct deposit or check; (2) specifies that the limit on fees or interest charged for the first two declined transactions each month applies to calendar months; and (3) requires the cards to be associated with ATM networks that ensure, rather than assure, the availability of in-network ATMs in the state.

Overall, this is a big boost for both employers and employees.  The CBIA had supported the measure and it had received “cautious” support from the AFL-CIO as well.

A bill to provide mandatory paid sick leave to employees and a bill to provide greater protection to state whistleblowers were among the employment law-related bills that were not voted upon in the final day of the legislative session — effectively killing them. 

The Paid Sick Leave bill, S.B. 217, had passed the Senate last week, but the House did not bring the measure up for a vote. As I indicated yesterday, nearly 25 amendments had been proposed on it — a sign that the bill was going to be in for a long fight.  My earlier coverage of the bill is available here. CT News Junkie has a report on it as well.

The Whistleblower bill, S.B. 335, had also passed the Senate, but again, the House did not act on that provision either. My earlier coverage of the bill is available here.

Other bills that were not acted upon by the legislature include: a Workplace Bullying bill; a bill protecting child in the entertainment industry from child labor abuses; and a bill to allow workers to be paid by a pay or debit card.

One bill that did pass this week allows for the regulation of various professional service organizations and about employee misclassification (H.B. 5113).  I’ll cover that in further detail in an upcoming post.

With the Connecticut General Assembly back in session this month for its short session, the Labor & Public Employees Committee has scheduled two hearings this week — February 26th at 2 p.m. and February 28th at 2:30 p.m. — to consider a variety of bills now being proposed.  The agendas for each can be found here and here

The February 26th Hearing overall, will be hearing bills related to minimum wage, the Department of Labor, unemployment compensation and prevailing wages.  Among the more notable of the bills being discussed is Senate Bill 216 which would fix a law that expired last fall that allows 15-year-olds to work in grocery stores as baggers, cashiers and shelf stockers. As I reported last fall, lawmakers simply forgot to renew it.  The bill would also grant immunity to employers who kept those 15-year-olds employed from last fall until present because of the legislative slipup.

Other notable bills being considered:

  • House Bill 5105 (which would increase minimum wage to $8.00 per hour effective January 1, 2009);
  • Senate Bill 60 (which would create a new private cause of action for bullying in the workplace);
  • House Bill  5113 (which would regulate "professional service organizations" , or situations where there is a "coemployment relationship in which all or a majority of the employees providing services to a client or to a division or work unit of a client are covered employee");
  • House Bill 5114 (which would allow employers to pay its employees via a debit card, instead of a check).

The sleeper bill of these, in my view, is House Bill 5114.  This would be a huge benefit to the thousands of workers who do not have their own checking account.  Many of these people pay large check cashing fees.  The debit card might allow these employees to use the card directly like a VISA or Mastercard.  Employers are allowed to use these for items such as Health Savings Accounts, so why not paychecks (so long as it remains the choice of the employee)?

I should also note that Senate Bill 216 should be a no-brainer as well.  Having sunset provisions, like the one in the prior statute (Conn. Gen. Stat. Sec. 31-23) are of no use, if no one at the General Assembly keeps track of them. 

The February 26th Hearing begins at 2 p.m. in Room 2D of the Legislative Office Building and is open to the public.

I’ll summarize the February 28th Hearing in an upcoming post.