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Post date: May 27 2015

Statement From A.G. Schneiderman On The NYS Department Of Labor’s Proposed Payroll Cards Rules

NEW YORK – Attorney General Eric T. Schneiderman today released the following statement on the New York State Department of Labor’s proposed rules to protect workers who use payroll cards, prepaid debit cards that are used in lieu of paychecks and direct deposits.

“I applaud the Department of Labor for taking action today to ensure payroll cards don’t chip away at New Yorkers’ wages. Payroll cards offer important benefits for many workers. However, as my office found in a report last year, too often, employees who use them are getting cheated or excessively charged when they try to spend their hard-earned paycheck. Today’s proposed rules directly follow the guidance in my Payroll Card Act to keep workers clearly informed about card fees, require informed consent to use the cards, prevent inappropriate fees and allow workers to withdraw wages and verify account balances free of charge at a convenient network of ATMs. I am hopeful that the strong protections contained in the proposed regulations will not be compromised during the comment period, and I am glad to see that New York is delivering for workers this year.”

In June 2014, Attorney General Schneiderman issued a report, “Pinched by Plastic,” which contained the results of a year-long inquiry into the payroll card practices of nearly forty national employers. Based on the report, in February,Attorney General Schneiderman introduced the Payroll Card Act, legislation regulating the use of payroll cards to increase protections for workers, clarify ambiguities in the law, and ensure that payroll cards offer a convenient and beneficial method for workers to access their pay. The bill has received  bipartisan support and is sponsored by Republican Senator Patrick Gallivan and Democratic Assemblyman Joe Morelle.  In March, Attorney General Schneiderman’s office also submitted comments to the federal Consumer Fraud Protection Board regarding proposed federal regulations which addressed certain aspects of payroll card use.

On Tuesday, Attorney General Schneiderman published an op-ed in am New York calling on the legislature to pass the Payroll Cards Act this session, or in the absence of action by the legislature, for the Department of Labor to issue regulations to protect workers.