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HOUSE AMENDED
PRIOR PRINTER'S NOS. 1804, 1840, 1974,
2088
PRINTER'S NO. 2183
THE GENERAL ASSEMBLY OF PENNSYLVANIA
SENATE BILL
No.
1265
Session of
2015
INTRODUCED BY WHITE, GREENLEAF, STEFANO, TOMLINSON,
EICHELBERGER, WAGNER AND VOGEL, MAY 13, 2016
AS AMENDED ON SECOND CONSIDERATION, HOUSE OF REPRESENTATIVES,
OCTOBER 19, 2016
AN ACT
Amending the act of December 19, 1975 (P.L.604, No.173),
entitled "An act to facilitate the use of electronic funds
transfer systems by providing that credits to accounts in
financial institutions designated by recipients shall satisfy
legal requirements for payments by cash or checks," further
providing for electronic funds transfers; providing for
definitions; further providing for consumer protections;
providing for payroll card accounts; and making editorial
changes.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. Section 1 of the act of December 19, 1975
(P.L.604, No.173), entitled "An act to facilitate the use of
electronic funds transfer systems by providing that credits to
accounts in financial institutions designated by recipients
shall satisfy legal requirements for payments by cash or
checks," is amended to read:
[Section 1. For the purposes of any statute, rule or
regulation requiring any payment to be made in lawful money or
by check, whether for wages, salaries, commissions or other
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claims of any kind, such payment may be made by credit to an
account in a bank, credit union or other financial institution
authorized to accept deposits or payments designated by the
recipient of such payment if the recipient has requested such
method of payment in writing.]
Section 1. Definitions.
The following words and phrases when used in this act shall
have the meanings given to them in this section unless the
context clearly indicates otherwise:
"ATM." AN AUTOMATED TELLER MACHINE.
"Financial institution." A bank , OR savings association AS
THOSE TERMS ARE DEFINED IN SECTION 1813 OF THE FEDERAL DEPOSIT
INSURANCE ACT (63 STAT. 873, 12 U.S.C. § 1813), or credit union
ELIGIBLE FOR INSURANCE OF MEMBER ACCOUNTS UNDER THE FEDERAL
CREDIT UNION ACT (48 STAT. 1216, 12 U.S.C. § 1751 ET SEQ.) .
"Payroll card account." An account that is directly or
indirectly established through an employer, to which transfers
of the employee's wages, salary, commissions or other
compensation are made.
Section 2. The act is amended by adding a section to read:
Section 1.1. Electronic funds transfers.
For the purposes of any statute, rule or regulation requiring
any payment to be made in lawful money or by check, whether for
wages, salaries, commissions or other claims of any kind, the
payment may be made by credit to an account in a financial
institution, including a payroll card account, authorized to
accept deposits or payments if the recipient has authorized the
method of payment in writing or electronically .
Section 3. Section 2 of the act is amended to read:
[Section 2. Every such request, as described in section 1,
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shall be effective provided that:
(i) the written agreement shall set forth all terms and
conditions under which such transfers are to be made and the
terms and conditions as to the method or methods to be used by
which a wage-earner may withdraw such request and terminate the
agreement; and
(ii) no funds transferred pursuant to a request as described
in section 1, shall be transferred by any employer or other
person to any account unless the party authorizing the transfer
of such funds shall have received a separate written record of
each such transfer at or prior to the time thereof.]
Section 2. Consumer protections.
When wages, salaries, commissions or other payments are
transferred to an account at a financial institution as
described in section 1 1.1 :
(1) the financial institution holding the account to
which transfers are made shall provide the employee or other
payee with the disclosures, notices of transfer, change in
term notices, access to account information and other
consumer protections to the extent required by 12 CFR Part
1005 (relating to electronic fund transfers (Regulation E));
and
(2) an employer shall provide an employee with a written
or electronic statement of earnings and deductions each pay
period in accordance with applicable law.
Section 4. The act is amended by adding sections to read:
Section 2.1. Payroll card accounts.
In addition to any other requirements under this act, all of
the following provisions apply when payment of wages, salaries ,
commissions or other compensation is made through transfers to a
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payroll card account :
(1) The employee shall be issued a payroll card in
accordance with 12 CFR Part 1005 (relating to electronic fund
transfers (Regulation E)) .
(2) The payroll card account shall be established at a
financial institution whose funds are insured by the Federal
Deposit Insurance Corporation or the National Credit Union
Administration.
(3) No employer may make the payment of wages, salary,
commissions or other compensation by means of a payroll card
account a condition of employment or a condition for the
receipt of any benefit or other form of remuneration for any
employee.
(4) Prior to obtaining an employee's authorization, the
employer shall provide the employee with CLEAR AND
CONSPICUOUS notice, in writing or electronically, of all of
the following:
(i) All of the employee's wage payment options.
(ii) The terms and conditions of the payroll card
account option, including the fees that may be deducted
from the employee's payroll card account by the card
issuer.
(iii) A notice that third parties may assess fees in
addition to the fees assessed by the card issuer.
(iv) The methods available to the employee for
accessing wages without fees.
(5) The payroll card account shall provide the employee
with the ability to make at least one withdrawal AND ONE IN-
NETWORK ATM WITHDRAWAL each pay period without charge for any
amount up to and including the full amount of the employee's
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net wages for that pay period, except that an employee paid
more frequently than weekly must be provided the ability to
make at least one withdrawal from the payroll card account
each week without cost for any amount up to and including the
full amount of the employee's net wages for that week.
(5) THE PAYROLL CARD ACCOUNT SHALL PROVIDE THE EMPLOYEE
WITH THE ABILITY WITHOUT CHARGE TO MAKE:
(I) AT LEAST ONE WITHDRAWAL EACH PAY PERIOD FOR ANY
AMOUNT UP TO AND INCLUDING THE FULL AMOUNT OF THE
EMPLOYEE'S NET WAGES FOR THAT PERIOD OR ONE SUCH
WITHDRAWAL WEEKLY IF THE EMPLOYEE IS PAID MORE FREQUENTLY
THAN WEEKLY.
(II) ONE IN-NETWORK ATM WITHDRAWAL EACH PAY PERIOD
OR ONE SUCH WITHDRAWAL WEEKLY IF THE EMPLOYEE IS PAID
MORE FREQUENTLY THAN WEEKLY.
(6) The payroll card account shall provide the employee
with a means of ascertaining the balance in the employee's
payroll card account through an automated telephone system or
other electronic means without cost to the employee.
(7) In addition to the fees prohibited under paragraphs
(5) and (6), an employer may not use a payroll card account
that charges fees to the employee for any of the following:
(i) The application, initiation or privilege of
participating in the payroll card program.
(ii) The issuance of the initial payroll card.
(iii) The issuance of one replacement card per
calendar year upon request of the employee.
(iv) The transfer of wages, salary, commissions or
other compensation from the employer to the payroll card
account.
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(v) Purchase transactions at the point of sale.
(VI) NONUSE OR INACTIVITY IN A PAYROLL CARD ACCOUNT
CONSISTING OF THE FAILURE TO WITHDRAW FUNDS FROM AN
ACCOUNT, DEPOSIT FUNDS INTO AN ACCOUNT, TRANSFER FUNDS TO
ANOTHER PERSON OR USE AN ACCOUNT FOR PURCHASE
TRANSACTIONS, IF THE NONUSE OR INACTIVITY IS LESS THAN 12
MONTHS IN DURATION.
(8) The funds in a payroll card account shall not
expire. If a payroll card has an expiration date during the
period when wages, salary or other compensation are applied
to the payroll card account by the employer and for 60 days
after the last transfer of wages, salary, commissions or
other compensation to the account, the employee shall be
provided a replacement card without cost prior to the
expiration date, unless prior to that date the account
becomes subject to the custody and control of the
Commonwealth under Article XIII.1 of the act of April 9, 1929
(P.L.343, No.176), known as The Fiscal Code, or pursuant to
the unclaimed property or escheat law of another state, the
District of Columbia or a territory of the United States.
(9) The employer shall honor an employee's written or
electronic request to change the employee's method of
receiving wages from a payroll card account to direct deposit
or negotiable check. The change shall take effect as soon as
practicable, but no later than the first payday after 14 days
from receipt by the employer of the employee's request and
any information necessary to implement the change.
(10) Nothing in this section may be construed to preempt
or override the terms of any collective bargaining agreement
with respect to the methods by which an employer provides
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payment of wages, salary, commissions or other compensation
to employees.
Section 5. Sections 3 and 4 of the act are amended to read:
[Section 3. This act shall supersede any inconsistent
provision of any other statute, rule or regulation.]
Section 3. Construction.
This act shall supersede any inconsistent provision of any
other statute, rule or regulation.
[Section 4. This act shall take effect immediately.]
Section 4. Effective date.
This act shall take effect immediately.
Section 6. An authorization for the payment of wages,
salaries or other compensation by means of a payroll card
account made prior to the effective date of section 2.1 of the
act shall remain valid until the employee requests a change of
payment method in accordance with section 2.1(9) of the act.
Section 7. This act shall take effect in 90 180 days.
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