1.1 	A bill for an act
1.2 	relating to commerce; modifying the definition of
1.3 	"wage"; regulating payroll card accounts; amending
1.4 	Minnesota Statutes 2004, section 177.23, subdivision
1.5 	4; proposing coding for new law in Minnesota Statutes,
1.6 	chapter 177.
1.7 	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

1.8 	Section 1. Minnesota Statutes 2004, section 177.23,
1.9 	subdivision 4, is amended to read:
1.10 		Subd. 4.Wage.  "Wage" means compensation due to an
1.11 	employee by reason of employment, payable in:  (1) legal tender
1.12 	of the United States,; (2) check on banks convertible into cash
1.13 	on demand at full face value or,; (3) except for instances of
1.14 	written objection to the employer by the employee, direct
1.15 	deposit to the employee's choice of demand deposit account; or
1.16 	(4) an electronic fund transfer to a payroll card account that
1.17 	meets all of the requirements set forth in section 177.255,
1.18 	subject to allowances permitted by rules of the department under
1.19 	section 177.28.

1.20 	Sec. 2. [177.255] PAYROLL CARD ACCOUNTS.
1.21 		Subdivision 1.Definitions. For the purposes of this
1.22 	section, the following terms have the meanings given them in
1.23 	this subdivision.
1.24 	(a) "Payroll card" means a card issued to an employee to
1.25 	spend or withdraw funds from the employee's payroll card account.
1.26 	(b) "Payroll card account" means an account that is
2.1 	established by an employer on behalf of an employee to which
2.2 	electronic fund transfers of the employee's wages are paid by
2.3 	the employer as required by this chapter and for which a payroll
2.4 	card is issued to the employee by the employer.  The payroll
2.5 	card account and wages transferred to the payroll card account
2.6 	must be owned by the employee and be subject to withdrawal and
2.7 	other disposition by the employee to the same extent and in the
2.8 	same manner as if the funds were deposited into the account by
2.9 	the employee.
2.10 	(c) "Payroll card issuer" means a bank or other entity that
2.11 	issues a payroll card on behalf of the employer.
2.12 	(d) "Offers a payroll card" includes both direct offers by
2.13 	the employer and employer distribution to employees of material
2.14 	describing a payroll card program prepared by a payroll card
2.15 	issuer.
2.16 	(e) "Free" means no fee is deducted from the employee's
2.17 	payroll card account or charged to the employee by any entity.
2.18 	(f) "Fee" means any and all fees, charges, surcharges, or
2.19 	costs deducted from an employee's payroll card account or
2.20 	charged to an employee by any entity.
2.21 		Subd. 2.Availability of wages. An employee who chooses
2.22 	to receive wages by electronic fund transfer to a payroll card
2.23 	account shall be able to withdraw from the employee's payroll
2.24 	account by a free transaction the employee's entire net pay, as
2.25 	stated on the employee's earnings statement, on the employee's
2.26 	regular payday.
2.27 		Subd. 3.Written disclosure. When offering an employee
2.28 	the option of payment of wages by electronic fund transfer to a
2.29 	payroll card account, an employer shall provide to the employee
2.30 	full written disclosure of all the employee's wage payment
2.31 	options and of the terms and conditions of each option and the
2.32 	employee's and employer's rights, liabilities, and
2.33 	responsibilities under each option.  The written disclosure
2.34 	shall include a complete itemized list of all fees and the
2.35 	minimum and maximum dollar amount of each fee that may be
2.36 	deducted from the employee's payroll card account or may be
3.1 	charged to the employee, by any entity, if the employee chooses
3.2 	to be paid by electronic fund transfer to a payroll card
3.3 	account, including but not limited to, automated teller machine
3.4 	fees, foreign automated teller machine fees, card issuance fees,
3.5 	card activation fees, card replacement fees, fees to close the
3.6 	payroll card account or withdraw remaining funds, monthly fees,
3.7 	balance inquiry fees, fees per transaction, fees for excess
3.8 	transactions, point of sale fees, inactivity or dormancy fees,
3.9 	loading fees, fees for statements and transaction histories, and
3.10 	fees related to the provision of customer service.  A copy of
3.11 	the written disclosure must be provided to the employee.
3.12 		Subd. 4.Written consent. The employer may initiate
3.13 	payment by electronic fund transfer to a payroll card account
3.14 	only after the employee has consented in writing to that method
3.15 	of payment, fully and freely without any coercion, intimidation,
3.16 	or fear of reprisal.  Consent to payment by electronic fund
3.17 	transfer to a payroll card account shall not be a condition of
3.18 	hire or of employment.  The written consent signed by the
3.19 	employee must include the itemized list of all fees and the
3.20 	minimum and maximum amount of each fee that may be deducted from
3.21 	the employee's payroll card account or charged to the employee
3.22 	by any entity.  A copy of the signed written consent must be
3.23 	provided to the employee.
3.24 		Subd. 5.Transactions; statements; fees. The employer
3.25 	shall provide to the employee at least one free transaction of
3.26 	the employee's choice each pay period and at least one free
3.27 	statement and transaction history each month that includes all
3.28 	deposits, withdrawals, deductions, or charges by any entity from
3.29 	or to the employee's payroll card account.  Any fee not fully
3.30 	disclosed to the employee under subdivision 3 or not included in
3.31 	the written consent signed by the employee as required by
3.32 	subdivision 4, shall not be deducted from the employee's payroll
3.33 	card account or charged to the employee by any entity.
3.34 		Subd. 6.No link to credit. The employer, depository
3.35 	institution, financial institution, or payroll card issuer shall
3.36 	not link the payroll card or payroll card account to any form of
4.1 	credit including, but not limited to, a loan against future pay
4.2 	or a cash advance on future pay.
4.3 		Subd. 7.Personal information. An employer is not
4.4 	entitled to any information generated by the employee's
4.5 	possession or use of a payroll card or payroll card account
4.6 	except to process transactions and administer the payroll card
4.7 	and payroll card account.  The employer shall also require that
4.8 	the payroll card issuer, depository institution, or financial
4.9 	institution where the payroll card accounts are maintained,
4.10 	agree not to use any information generated by the possession or
4.11 	use of the payroll card or payroll card account for any purpose
4.12 	except to process transactions and administer the payroll card
4.13 	and payroll card account.
4.14 		Subd. 8.Languages other than english. Any employer who
4.15 	offers a payroll card to an employee using written materials in
4.16 	a language other than English, shall provide, or require in its
4.17 	contract with the payroll card issuer that all written
4.18 	disclosures be provided, in such other language to the employee,
4.19 	and that consumer services be provided in such other language to
4.20 	the employee.
4.21 		Subd. 9.Direct deposit protections. Notwithstanding any
4.22 	other provision of law to the contrary, any existing statutory
4.23 	protections provided to employees who receive payment of wages
4.24 	by the method of direct deposit into a bank account shall be
4.25 	extended to employees who receive payment of wages by electronic
4.26 	fund transfer into a payroll card account.
4.27 		Subd. 10.Change of wage payment method. If an employee
4.28 	who is being paid wages by electronic fund transfer to a payroll
4.29 	card account requests, in writing, to be paid wages by legal
4.30 	tender, check, or direct deposit, the employer shall, within 14
4.31 	days of the employee's request, begin payment by the requested
4.32 	method.
4.33 		Subd. 11.Violation; penalty. A violation of this
4.34 	section shall be considered a violation of section 181.79 and
4.35 	shall be penalized accordingly.
4.36 	
EFFECTIVE DATE. This act is effective....