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New York’s new direct deposit and debit card “paycheck” regulations

New York State has new direct deposit and debit card “paycheck” rules effective March 7, 2017.

Since this information is incredibly dry, here is a convenient list of highlights for you to easily scan.

Direct Deposit Rules

Employees must…

  • give written consent prior to receiving their wages by direct deposit
  • receive a copy of that written consent
  • choose the financial institution to which their wages will be sent

Employers must…

  • keep record of consent throughout the duration of the employee’s employment as well as six years post-employment

Debit Card Rules

Employees must…

  • give written consent prior to receiving their wages by debit card
  • receive a copy of that written consent
  • have full access to wages with limited financial and geographical barriers
  • have access to debit card related services
    • Phone or online customer service
    • Startup
    • Maintenance
    • Overdraft
    • Inactivity
    • Balance inquires
    • Account closing
  • have a no-fee ATM located within a “reasonable distance” from where they live or work
    • “reasonable distance” remains undefined
  • have at least one method available to withdraw their total wages and remaining debit card balance
  • be given a notice of associated accounts closing due to inactivity
    • be given those remaining account funds within seven days after account closure
  • not be responsible for any associated card fees

Employers must…

  • prohibit the debit card from being linked to any form of credit including advance pay
  • provide debit cards that do not expire
  • not receive kickbacks from card issuers, sponsors, or third parties who administer the wages via debit cards
  • receive employee written consent seven business days prior to payment
  • keep record of consent throughout the duration of the employee’s employment as well as six years post-employment

Both Method Rules

The written consent must…

  • be a plain language document describing all options how employees may receive pay
  • be presented in English and employee’s primary language
  • provide a statement that debit card or direct deposit is NOT a requirement
  • provide a statement that employees will not be charged service fees to access their wages in full
  • have a list of locations within a “reasonable distance” where employees can access all their wages fee-free if debit card is an option
  • be given a hard copy or electronic copy (as long as employees are told where to print for free within the workplace)

And finally…

  • Employees may be allowed to withdraw their consent at anytime and request a different method of pay
    • Employers will have two weeks to make the adjustment
  • Employers may not bully their employees into choosing direct deposit or debit card options
  • All the new rules apply to everyone except individuals employed in a bona fide executive, administrative, or professional capacity whose earnings exceed $900 per week or  farms unaffiliated with a factory


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This article provides general information and shouldn’t be construed as legal or HR advice. Since employment laws may change over time and can vary by location and industry, please consult a lawyer or HR expert for advice specific to your business. You can also contact Payroll Systems to inquire about our HR support services.