Minnesota Legislature
HF 2141
1st Engrossment - 84th Legislature (2005 - 2006) Posted on 12/15/2009 12:00am
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A bill for an act
relating to commerce; modifying the definition of
"wage"; regulating payroll card accounts; amending
Minnesota Statutes 2004, section 177.23, subdivision
4; proposing coding for new law in Minnesota Statutes,
chapter 177.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
Section 1.
Minnesota Statutes 2004, section 177.23,
subdivision 4, is amended to read:
Subd. 4.
Wage.
"Wage" means compensation due to an
employee by reason of employment, payable innew text begin : (1) new text end legal tender
of the United Statesdeleted text begin ,deleted text end new text begin ; (2) new text end check on banks convertible into cash
on demand at full face value ordeleted text begin ,deleted text end new text begin ; (3) new text end except for instances of
written objection to the employer by the employee, direct
deposit to the employee's choice of demand deposit accountnew text begin ; or
(4) an electronic fund transfer to a payroll card account that
meets all of the requirements set forth in section 177.255new text end ,
subject to allowances permitted by rules of the department under
section 177.28.
Sec. 2.
new text begin
[177.255] PAYROLL CARD ACCOUNTS.
new text end
new text begin Subdivision 1. new text end
new text begin Definitions. new text end
new text begin
For the purposes of this
section, the following terms have the meanings given them in
this subdivision.
new text end
new text begin
(a) "Payroll card" means a card issued to an employee to
spend or withdraw funds from the employee's payroll card account.
new text end
new text begin
(b) "Payroll card account" means an account that is
established by an employer on behalf of an employee to which
electronic fund transfers of the employee's wages are paid by
the employer as required by this chapter and for which a payroll
card is issued to the employee by the employer. The payroll
card account and wages transferred to the payroll card account
must be owned by the employee and be subject to withdrawal and
other disposition by the employee to the same extent and in the
same manner as if the funds were deposited into the account by
the employee.
new text end
new text begin
(c) "Payroll card issuer" means a bank or other entity that
issues a payroll card on behalf of the employer.
new text end
new text begin
(d) "Offers a payroll card" includes both direct offers by
the employer and employer distribution to employees of material
describing a payroll card program prepared by a payroll card
issuer.
new text end
new text begin
(e) "Free" means no fee is deducted from the employee's
payroll card account or charged to the employee by any entity.
new text end
new text begin
(f) "Fee" means any and all fees, charges, surcharges, or
costs deducted from an employee's payroll card account or
charged to an employee by any entity.
new text end
new text begin Subd. 2. new text end
new text begin Availability of wages. new text end
new text begin
An employee who chooses
to receive wages by electronic fund transfer to a payroll card
account shall be able to withdraw from the employee's payroll
account by a free transaction the employee's entire net pay, as
stated on the employee's earnings statement, on the employee's
regular payday.
new text end
new text begin Subd. 3. new text end
new text begin Written disclosure. new text end
new text begin
When offering an employee
the option of payment of wages by electronic fund transfer to a
payroll card account, an employer shall provide to the employee
full written disclosure of all the employee's wage payment
options and of the terms and conditions of each option and the
employee's and employer's rights, liabilities, and
responsibilities under each option. The written disclosure
shall include a complete itemized list of all fees and the
minimum and maximum dollar amount of each fee that may be
deducted from the employee's payroll card account or may be
charged to the employee, by any entity, if the employee chooses
to be paid by electronic fund transfer to a payroll card
account, including but not limited to, automated teller machine
fees, foreign automated teller machine fees, card issuance fees,
card activation fees, card replacement fees, fees to close the
payroll card account or withdraw remaining funds, monthly fees,
balance inquiry fees, fees per transaction, fees for excess
transactions, point of sale fees, inactivity or dormancy fees,
loading fees, fees for statements and transaction histories, and
fees related to the provision of customer service. A copy of
the written disclosure must be provided to the employee.
new text end
new text begin Subd. 4. new text end
new text begin Written consent. new text end
new text begin
The employer may initiate
payment by electronic fund transfer to a payroll card account
only after the employee has consented in writing to that method
of payment, fully and freely without any coercion, intimidation,
or fear of reprisal. Consent to payment by electronic fund
transfer to a payroll card account shall not be a condition of
hire or of employment. The written consent signed by the
employee must include the itemized list of all fees and the
minimum and maximum amount of each fee that may be deducted from
the employee's payroll card account or charged to the employee
by any entity. A copy of the signed written consent must be
provided to the employee.
new text end
new text begin Subd. 5. new text end
new text begin Transactions; statements; fees. new text end
new text begin
The employer
shall provide to the employee at least one free transaction of
the employee's choice each pay period and at least one free
statement and transaction history each month that includes all
deposits, withdrawals, deductions, or charges by any entity from
or to the employee's payroll card account. Any fee not fully
disclosed to the employee under subdivision 3 or not included in
the written consent signed by the employee as required by
subdivision 4, shall not be deducted from the employee's payroll
card account or charged to the employee by any entity.
new text end
new text begin Subd. 6. new text end
new text begin No link to credit. new text end
new text begin
The employer, depository
institution, financial institution, or payroll card issuer shall
not link the payroll card or payroll card account to any form of
credit including, but not limited to, a loan against future pay
or a cash advance on future pay.
new text end
new text begin Subd. 7. new text end
new text begin Personal information. new text end
new text begin
An employer is not
entitled to any information generated by the employee's
possession or use of a payroll card or payroll card account
except to process transactions and administer the payroll card
and payroll card account. The employer shall also require that
the payroll card issuer, depository institution, or financial
institution where the payroll card accounts are maintained,
agree not to use any information generated by the possession or
use of the payroll card or payroll card account for any purpose
except to process transactions and administer the payroll card
and payroll card account.
new text end
new text begin Subd. 8. new text end
new text begin Languages other than english. new text end
new text begin
Any employer who
offers a payroll card to an employee using written materials in
a language other than English, shall provide, or require in its
contract with the payroll card issuer that all written
disclosures be provided, in such other language to the employee,
and that consumer services be provided in such other language to
the employee.
new text end
new text begin Subd. 9. new text end
new text begin Direct deposit protections. new text end
new text begin
Notwithstanding any
other provision of law to the contrary, any existing statutory
protections provided to employees who receive payment of wages
by the method of direct deposit into a bank account shall be
extended to employees who receive payment of wages by electronic
fund transfer into a payroll card account.
new text end
new text begin Subd. 10. new text end
new text begin Change of wage payment method. new text end
new text begin
If an employee
who is being paid wages by electronic fund transfer to a payroll
card account requests, in writing, to be paid wages by legal
tender, check, or direct deposit, the employer shall, within 14
days of the employee's request, begin payment by the requested
method.
new text end
new text begin Subd. 11.new text end
new text begin Violation; penalty.new text end
new text begin A violation of this
section shall be considered a violation of section 181.79 and
shall be penalized accordingly.
new text end
new text begin EFFECTIVE DATE. new text end
new text begin
This act is effective....
new text end