Payroll Cards Facing Legal Scrutiny

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In 2013, New York’s Attorney General began investigating companies that pay hourly employees using prepaid payroll cards, with the concern that fees associated with pay card withdrawals may be insufficiently disclosed or excessive, and that the cards may decrease employees’ take-home pay which may, in some cases, result in pay below the minimum wage.

There was also concern that these cards may not comply with state laws governing printed payroll statements and written consent for using the cards; federal law which prohibits mandatory use of prepaid payroll cards as a condition of employment; and collective bargaining agreements.
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