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NY regulates paying workers with debit cards: Gov. Cuomo speaks out

June 02, 2015

The New York state Department of Labor published draft regulations regarding how businesses pay workers with debit cards, Governor Andrew Cuomo announced.

The proposed regulations outline the responsibilities of businesses that use debit cards to pay workers and prohibit employers from profiting from or passing along costs to the employee. These rules appeared in the State Register on May 27 and will take effect following a 45-day notice and comment period.

According to Governor Cuomo’s office, an estimated 13,000 businesses in New York State pay approximately 200,000 workers through debit card. Until now such cards have not been as regulated as other payment methods like cash, check and direct deposit.

Under the new regulations, payment through a debit card would require advance consent, which businesses must document and keep on record for six years. The proposed changes also require employers to notify employees about local locations where they can access their wages for free. In addition, employers are required to provide unlimited free ATM withdrawals within a local network and a method to withdraw the full amount of wages each pay period.

The new rules expressly prohibit common fees like those for customer service, account maintenance, overdraft and inactivity.

“An honest day’s pay for an honest day’s work should never come with an asterisk,” Governor Cuomo said. “These regulations crack down on one of the more underhanded forms of wage theft and will better protect hundreds of thousands of employees who work and live in New York.”