MasterCard today announced new standards for payroll cards that will require employers to offer employees the choice of direct deposit, a payroll card or other means as required by law. It would also require employers to give employees access to their full pay for free at least once per pay period.

Many staffing firms issue payroll cards to employees. The cards act as debit cards, and employees’ pay is loaded onto the cards. Such cards are marketed as a lower cost solution to paper checks and as a way to pay employees who do not have checking accounts.

MasterCard’s new rules would take effect Oct. 1, 2014, for existing programs and July 1, 2014 for new programs.

The new MasterCard rules include:

• Allowing employees to choose how they are paid, by card, direct deposit or other means, as required by law.
• Allowing payroll cardholders access to their full pay for free at least once per pay period.
• Providing free and easy access to account balance information online or via mobile.
• Coverage by MasterCard’s Zero Liability guarantee against fraudulent use and the ability to freeze a lost or stolen card and have funds reissued on a new card.
• A disclosure table will outline the services and fees associated with the card.
• Providing resources to employees to help them understand the features and benefits of their payroll card.

“Payroll cards serve as one way to bring the traditionally underserved into the financial mainstream,” said Ron Hynes, group executive, Global Prepaid Solutions, MasterCard. “These standards will help ensure that employees not only understand the choices available, but allow them to take advantage of benefits like direct deposit, online shopping and bill payment that had not been traditionally available to them.”

Payroll cards have received criticism in the past, and the New York State Attorney General’s Office launched an investigation of them in July.