1.1 	A bill for an act
1.2 	relating to commerce; modifying definition of "wage";
1.3 	regulating payroll cards and payroll accounts;
1.4 	amending Minnesota Statutes 2004, section 177.23,
1.5 	subdivision 4; proposing coding for new law in
1.6 	Minnesota Statutes, 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:
1.12 	(1) legal tender of the United States,;
1.13 	(2) check on banks convertible into cash on demand at full
1.14 	face value or,;
1.15 	(3) except for instances of written objection to the
1.16 	employer by the employee, direct deposit to the employee's
1.17 	choice of demand deposit account; or 
1.18 	(4) an electronic fund transfer to a payroll card account
1.19 	that meets all of the requirements of section 177.255, subject
1.20 	to allowances permitted by rules of the department under section
1.21 	177.28.

1.22 	Sec. 2. [177.255] PAYROLL CARD ACCOUNT.
1.23 		Subdivision 1.Definitions. For the purposes of this
1.24 	section, the following terms shall have the meanings given them.
1.25 	(a) "Payroll card" means a card issued to an employee to
1.26 	access funds from the employee's payroll card account, in a
2.1 	manner consistent with this section.
2.2 	(b) "Payroll card account" means an arrangement whereby an
2.3 	employer pays each participating employee's wages by making an
2.4 	electronic fund transfer to an account.  Each participating
2.5 	employee must own the portion of the payroll card account that
2.6 	corresponds to the employee's wages, and participating employees
2.7 	receive a payroll card to access their funds.
2.8 	(c) "Payroll card issuer" means an employer that
2.9 	establishes payroll card accounts for paying wages to its
2.10 	employees.  The term also includes a bank or other entity that
2.11 	issues a payroll card on behalf of an employer.  An agreement
2.12 	between the employer and the bank may specify which party is
2.13 	responsible for the requirements of this section.
2.14 	(d) "Free" means no fee is deducted from the employee's
2.15 	payroll card account or charged to the employee by the
2.16 	employee's payroll card issuer or issuers.
2.17 	(e) "Fee" means any and all fees, charges, surcharges, or
2.18 	costs deducted from an employee's payroll card account or
2.19 	charged to an employee by the employee's payroll card issuer or
2.20 	issuers.
2.21 		Subd. 2.Free withdrawal. A payroll card issuer must
2.22 	allow an employee who chooses to receive wages through a payroll
2.23 	card account to make a free withdrawal from the employee's
2.24 	payroll account of an amount up to and including the employee's
2.25 	entire net pay as stated on the employee's earnings statement.
2.26 	This free transaction provided by the payroll card issuer must
2.27 	be available on or after the employee's regular payday.
2.28 		Subd. 3.Fee disclosure. When offering an employee the
2.29 	option of receiving payment of wages through a payroll card
2.30 	account, an employer must provide to the employee a written
2.31 	disclosure of all the employee's wage payment options.  The
2.32 	disclosure shall state the terms and conditions of the payroll
2.33 	card account option, including a complete itemized list of, and
2.34 	dollar amounts for, all fees that may be deducted from the
2.35 	employee's payroll card account or may be charged to the
2.36 	employee by the employee's payroll card issuer or issuers,
3.1 	including, but not limited to, automated teller machine fees,
3.2 	card issuance fees, card activation fees, card replacement fees,
3.3 	fees to close the payroll card account or withdraw remaining
3.4 	funds, monthly fees, balance inquiry fees, fees per transaction,
3.5 	fees for excess transactions, point of sale fees, loading fees,
3.6 	fees for statements and transaction histories, and fees related
3.7 	to the provision of customer service.  The disclosure must also
3.8 	state that third parties may assess transaction fees in addition
3.9 	to the fees assessed by the employee's payroll card issuer or
3.10 	issuers.  A copy of the written disclosure must be provided to
3.11 	the employee.
3.12 		Subd. 4.Employee consent to electronic payment. The
3.13 	employer may initiate payment by electronic fund transfer to a
3.14 	payroll card account only after the employee has voluntarily
3.15 	consented in writing to that method of payment.  Consent to
3.16 	payment by electronic fund transfer to a payroll card account
3.17 	shall not be a condition of hire or of employment.  On the
3.18 	consent form, the employee must also acknowledge receiving the
3.19 	payroll card issuer's written disclosure of the payroll card
3.20 	account terms and conditions under subdivision 3.  A copy of the
3.21 	signed written consent must be provided to the employee.
3.22 		Subd. 5.Monthly transaction statement. The payroll card
3.23 	issuer shall provide an option for the employee to receive at
3.24 	least one free transaction history each month that includes all
3.25 	deposits, withdrawals, deductions, or charges by an entity from
3.26 	or to the employee's payroll card account.  Any fee assessed by
3.27 	the employee's payroll card issuer that was not disclosed to the
3.28 	employee may not be deducted from the employee's payroll card
3.29 	account or charged to the employee.
3.30 		Subd. 6.Tying arrangements prohibited. A payroll card
3.31 	issuer shall not link the payroll card or payroll card account
3.32 	to any form of credit, including, but not limited to, a loan
3.33 	against future pay or a cash advance on future pay.
3.34 		Subd. 7.Employer access to account information. An
3.35 	employer is not entitled to any information generated by the
3.36 	employee's possession or use of a payroll card or payroll card
4.1 	account except to process transactions and administer the
4.2 	payroll card and payroll card account.
4.3 		Subd. 8.Foreign language disclosures. Any employer who
4.4 	offers a payroll card to an employee using written materials in
4.5 	a language other than English shall ensure that the payroll card
4.6 	account disclosures under subdivision 3 and all payroll card
4.7 	account agreements are provided in that same language.
4.8 		Subd. 9.Termination of electronic payment. If an
4.9 	employee who is being paid wages by electronic fund transfer to
4.10 	a payroll card account requests in writing to be paid wages by
4.11 	legal tender, check, or direct deposit, the employer shall,
4.12 	within 14 days of the employee's request, begin payment by the
4.13 	requested method.
4.14 		Subd. 10.Prohibited fees. A payroll card issuer may not
4.15 	charge an inactivity or a dormancy fee on a payroll card account.
4.16 		Subd. 11.Penalties. Violation of this section is
4.17 	considered a violation of section 181.79 and subject to the same
4.18 	penalties.