SF 1495

as introduced - 85th Legislature (2007 - 2008) Posted on 12/15/2009 12:00am

A bill for an act
relating to employment; regulating payroll cards; amending Minnesota Statutes
2006, section 177.255; Laws 2005, chapter 158, section 4.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2006, section 177.255, is amended to read:

177.255 PAYROLL CARD ACCOUNTS.

Subdivision 1.

Definitions.

For the purposes of this section, the following terms
have the meanings given them in this subdivision.

(a) "Payroll card" means a card issued to an employee by an employer or other
payroll card issuer to access funds from the employee's deleted text begin employee deleted text end payroll card account.

(b) "Payroll card account" means an agreement providing that an employer pays
each participating employee's wages by making an electronic fund transfer to an account,
and participating employees receive a payroll card to access their funds.

(c) "Payroll card issuer" means deleted text begin an employer that issues a payroll card to an employee
or deleted text end a bank or other entity that issues a payroll card to an employee on behalf of the employer.

(d) "Offers a payroll card" includes both the direct offers by the employer and the
employer distribution to employees of material describing a payroll card program prepared
by a payroll card issuer other than the employer. new text begin This term does not include the provision
of summary promotional materials, such as posters and flyers.
new text end

(e) "Free" means no fee is deducted from an employee's payroll card account or
charged to the employee by deleted text begin the employer or deleted text end the payroll card issuer.

(f) "Fee" means any and all fees, charges, surcharges, or costs.

deleted text begin Subd. 2. deleted text end

deleted text begin Filing. deleted text end

deleted text begin A payroll card issuer must file with the commissioner a notice
containing:
deleted text end

deleted text begin (1) the entity's true name;
deleted text end

deleted text begin (2) any other names under which the entity conducts business;
deleted text end

deleted text begin (3) the entity's address, which may not be a post office box; and
deleted text end

deleted text begin (4) the entity's telephone number.
deleted text end

Subd. 3.

Ownership of wages.

Wages paid by electronic funds transferred to
an employee's payroll card account must be owned by the employee new text begin , with no interest
retained by the employer new text end .

Subd. 4.

Availability of wages.

An employee who chooses to be paid wages
by electronic fund transfer to a payroll card account must be permitted to withdraw
by a free transaction from the employee's payroll card account, an amount up to and
including the total amount of the employee's entire net pay, as stated on the employee's
earnings statement. The free transaction must be available to the employee on and after
the employee's regular payday.

Subd. 5.

Written disclosure new text begin ; written consent new text end .

When offering an employee the
option of being paid wages by electronic fund transfer to a payroll card account, the
employer shall provide to the employee written disclosure in plain language of all
the employee's wage payment options. The written disclosure shall state the terms
and conditions of the payroll card account option, including, but not limited to, the
requirements set forth in this section and a complete itemized list of all fees that may be
deducted from the employee's payroll card account by the deleted text begin employer or deleted text end new text begin payroll new text end card issuer.
The disclosure must also state that third parties may assess transaction fees in addition to
the fees assessed by the employee's payroll card issuer or issuers. For fees that may be
deducted or charged by the deleted text begin employer or deleted text end payroll card issuer, the dollar amount of each fee
must be stated. A copy of the written disclosure must be provided to the employee.

new text begin The employer may initiate payment of wages to an employee by electronic fund
transfer to a payroll card account only after the employee has been provided the written
disclosure and has voluntarily consented in writing to that method of payment. The written
disclosure and the written consent may be included in the same document. Consent to
payment of wages by electronic fund transfer to a payroll card account shall not be a
condition of hire or of continued employment. A copy of the signed written consent must
be provided to the employee and be retained by the employer. Written disclosures and
consents under this subdivision may be administered electronically in accordance with the
Minnesota Uniform Electronic Transactions Act.
new text end

deleted text begin Subd. 6. deleted text end

deleted text begin Written consent. deleted text end

deleted text begin The employer may initiate payment of wages to an
employee by electronic fund transfer to a payroll card account only after the employee has
voluntarily consented in writing to that method of payment. Consent to payment of wages
by electronic fund transfer to a payroll card account shall not be a condition of hire or
of continued employment. The written consent signed by the employee must include the
terms and conditions of the payroll card account option as provided in subdivision 5. A
copy of the signed written consent must be provided to the employee and be retained by
the employer.
deleted text end

deleted text begin Subd. 7. deleted text end

deleted text begin Transactions; statements; fees. deleted text end

deleted text begin The employer shall provide to the
employee, upon the employee's written or oral request, one free transaction history each
month that includes all deposits, withdrawals, deductions, or charges by any entity from
or to the employee's payroll card account.
deleted text end

Subd. 8.

No link to credit.

The payroll card or payroll card account shall not be
linked to any form of credit including, but not limited to, a loan against future pay or a
cash advance on future pay. new text begin For purposes of this subdivision, overdrafts shall not be
deemed a form of credit.
new text end

deleted text begin Subd. 9. deleted text end

deleted text begin Personal information. deleted text end

deleted text begin Unless the employee consents in writing to the use,
information generated by the employee's possession or use of a payroll card or payroll
card account may only be used to process transactions and administer the payroll card and
the payroll card account.
deleted text end

Subd. 10.

Languages other than English.

An employer who offers a payroll card
account option to an employee using materials in a language other than English, shall
provide the written disclosure and written consent required by subdivisions 5 and 6, and
all payroll card account agreements in that other language.

Subd. 11.

Change of wage payment method.

An employee who is being paid
wages by electronic fund transfer to a payroll card account may request to be paid wages
by another method that is allowed by law. Upon the employee's request to change the
wage payment method, the employer shall provide a form on which the employee shall
indicate the change. The employer shall, within 14 days of the employee's request, begin
payment by a different allowable method.

Subd. 12.

deleted text begin Limitation deleted text end new text begin Prohibition new text end on employer fees.

An employer may not charge
an employee initiation, participation, loading, or other new text begin employer new text end fees to receive wages
payable in an electronic fund transfer to a payroll card account.

Subd. 13.

Prohibited deductions and charges.

Fees imposed by the deleted text begin employer or deleted text end
payroll card issuer that were not disclosed to the employee shall not be deducted from the
employee's payroll card account or charged to the employee. Inactivity or dormancy fees
shall not be deducted from an employee's payroll card account or charged to the employee.

Subd. 14.

Violations; penalty.

A violation of this section is subject to the penalty
provided in section 177.32, subdivision 1.

Sec. 2.

Laws 2005, chapter 158, section 4, is amended to read:

Sec. 4. EFFECTIVE DATE deleted text begin ; TERMINATION deleted text end .

This act is effective the day following final enactment. deleted text begin The amendments made by
section 1, and sections 2 and 3 expire May 31, 2007.
deleted text end

Sec. 3. new text begin EFFECTIVE DATE.
new text end

new text begin Section 1 is effective June 1, 2007. Section 2 is effective the day following final
enactment.
new text end