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A08930
THE GENERAL ASSEMBLY OF PENNSYLVANIA
SENATE BILL
No.
1265
Session of
2015
INTRODUCED BY WHITE, TARTAGLIONE, GREENLEAF, STEFANO, TOMLINSON,
EICHELBERGER, WAGNER AND VOGEL, MAY 13, 2016
SENATOR WHITE, BANKING AND INSURANCE, AS AMENDED, MAY 18, 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 for coordination with
Federal law; 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
claims of any kind, such payment may be made by credit to an
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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:
"Financial institution." A bank, savings association or
credit union.
"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.
"Record." As defined in section 103 of the act of December
16, 1999 (P.L.971, No.69), known as the Electronic Transactions
Act.
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,
COMPENSATION, IF THE RECIPIENT OF THE PAYMENT MAKES A REQUEST IN
A RECORD 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 by if
the recipient has authorized the method of payment in writing or
electronically of the payment if the recipient has requested
that method of payment in a record .
Section 3. Section 2 of the act is amended to read:
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[Section 2. Every such request, as described in section 1,
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 compensation are
transferred to an account at a financial institution as
described in section 1, the financial institution shall provide
the employee with disclosures, notice of transfers, access to
account information and other consumer protections in accordance
with 12 CFR Part 1005 (relating to electronic fund transfers
(Regulation E)).
When wages, salaries, commissions or other payments are
transferred to an account at a financial institution as
described in section 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
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(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.
The In addition to any other requirements under this act, all
of the following provisions apply when payment of wages,
salaries or , commissions or other compensation is made through a
transfer into transfers to a payroll card account shall be
effective for purposes of section 1.1 if: .
(1) the The employee has been shall be issued a payroll
card in accordance with 12 CFR Part 1005 (relating to
electronic fund transfers (Regulation E)) ; .
(2) the The payroll card account is shall be established
at a federally insured financial institution ; and 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 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.
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(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.
(3) the (5) The payroll card account provides shall
provide the employee with the ability to make at least one
withdrawal each pay period without charge for any amount up
to and including the full amount of the employee's 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.
Section 2.2. Coordination with Federal Law.
This act modifies, limits or supersedes the Electronic
Signatures in Global and National Commerce Act (Public Law 106-
229, 15 U.S.C. § 7001 et seq.). This act does not modify, limit
or supersede section 101(c) of the Electronic Signatures in
Global and National Commerce Act (Public Law 106-229, 15 U.S.C.
§ 7001(c)), if otherwise applicable, or authorize electronic
delivery of any notices described in section 103(b) of the
Electronic Signatures in Global and National Commerce Act
(Public Law 106-229, 15 U.S.C. § 7003(b)).
(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:
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(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.
(v) Purchase transactions at the point of sale.
(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
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or override the terms of any collective bargaining agreement
with respect to the methods by which an employer provides
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. This act shall apply to payments made before, on
or after the effective date of this act. 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 immediately in 90
days.
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