Posted: | October 18, 2023 01:08 PM |
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From: | Senator Nick Miller and Sen. Lisa Baker |
To: | All Senate members |
Subject: | Electronic Payroll |
In the near future, we plan to introduce legislation allowing an employer to pay employees exclusively by electronic means through use of direct deposit or a payroll card. Under current law, payroll cards and direct deposit may be offered to employees, but any single employee may request a paper check and the employer is required to provide it. 25 states, including Massachusetts, Washington, Texas, and Alabama, allow employers to pay wages exclusively through electronic means. Technological advancements have improved and expanded wage payments, making paper checks antiquated and less beneficial for workers than electronic alternatives. Currently, 93% of American workers are paid via direct deposit while less than 5% continue to receive paper checks. Paper checks can be costly and difficult to transact and may leave consumers vulnerable to fraud or theft risks. Payroll cards offer stronger consumer protections and advantages over paper checks. Employees can get their entire pay in cash without any cost, and have more options to access their money, such as from banks and ATMs, through cash-back at many retailers, through online bill-payment services, or by making purchases over the internet. Payroll cards cannot be over-drafted (resulting in overdraft fees). Lastly, they do not expire and afford other critical consumer protections like fraud protections and dispute resolution. Our legislation would help ensure that Pennsylvania employers can pay their employees timely during emergencies, such as fires, floods, snowstorms, or disasters. And for those paid by paper check that is delivered by postal mail, direct deposit or payroll cards do not face the potential for delayed delivery. These and other circumstances create challenges for the physical delivery of checks, as well as traveling to a bank or check-casher. Logistical impacts associated with the COVID-19 pandemic also became a strong factor for enhancing the digitalization of payments. Finally, note that this legislation does not change current consumer protections or safeguards around the use of payroll cards, including:
It is our hope you will join in co-sponsoring this legislation to modernize Pennsylvania’s payroll methods. |
Introduced as SB1026