Change Date March 3, 2009 March 24, 2009 March 24, 2009 May 6, 2009 June 27, 2009 July 26, 2009 December 14, 2009 March 30, 2010 Change Description Ad

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1 VISA USA, INC Employee PayChoice Green and Yellow State Legal Authorities (with Pay Stub Information) (March 30, 2010) This survey is not does not provide legal advice or attempt to address the numerous issues that may arise when paying employees their wages

2 Change Date March 3, 2009 March 24, 2009 March 24, 2009 May 6, 2009 June 27, 2009 July 26, 2009 December 14, 2009 March 30, 2010 Change Description Added electronic pay stub information for each state Added Table of Changes For South Carolina, changed the name of agency to the Department of Labor, Licensing and Regulation from the Department of Labor, Licensing and Registration Added yellow states (Michigan, Utah and Virginia) Yellow states are those that allow paychoice for some, but not all employees Added Florida as a yellow state Added Delaware as a green state Added Oklahoma as a green state Made Iowa a yellow state, rather than a green state Added new Utah regulation effective March 24, 2010 This survey is not does not provide legal advice or attempt to address the numerous issues that may arise when paying employees their wages 2

3 Alabama G Alabama does not regulate method of wage payment The state defers to the federal Fair Labor Standards Act with respect to most wage and hour issues None applicable Earning Statements: Alabama does not require employers to provide earning statements Employers that provide earning statements may select the method of delivery Colorado G The wage payment statute expressly permits the use of payroll cards if certain conditions are met Earning Statements: At least monthly, or at the time of wage payment, an employer must furnish employees with an itemized pay statement The statutes and regulations do not address permissible methods of delivery The Agency has informally advised that electronic delivery is permitted if the employee is able to download the statement or otherwise obtain a hard copy Colorado Revised Statute, Article 4 Wages Proper payment--record of wages (1) Negotiable instrument required No employer or agent or officer thereof shall issue, in payment of or as an evidence of indebtedness for wages due an employee, any order, check, draft, note, memorandum, or other acknowledgment of indebtedness unless the same is negotiable and payable upon demand without discount in cash at a bank organized and existing under the general banking laws of the state of Colorado or the United States or at some established place of business in the state The name and address of the drawee shall appear upon the face of the order, check, draft, note, memorandum, or other acknowledgment of indebtedness; except that such provisions shall not apply to a public utility engaged in interstate commerce and otherwise subject to the power of the public utilities commission At the time of the issuance of same, the maker or drawer shall have sufficient funds in or credit with the bank or other drawee for the payment of same Where such order, check, draft, note, memorandum, or other acknowledgment of indebtedness is protested or dishonored on the ground of insufficiency of funds or credit, the notice of memorandum of protest or dishonor thereof shall be admissible as proof of presentation, nonpayment, and protest (2) Direct deposit Nothing in this article shall prohibit an This survey is not does not provide legal advice or attempt to address the numerous issues that may arise when paying employees their wages 3

4 employer from depositing wages due or to become due or an advance on wages to be earned in an account in any bank, savings and loan association, credit union, or other financial institution authorized by the United States or one of the several states to receive deposits in the United States if the employee has voluntarily authorized such deposit in the financial institution of the employee's choice (25)(a) Nothing in this article shall prohibit an employer from depositing an employee's wages on a paycard, so long as the employee: (I) Is provided free means of access to the entire amount of net pay at least once per pay period; or (II) May choose to use other means for payment of wages as authorized in subsections (1) and (2) of this section (b) As used in this section, paycard means an access device that an employee uses to receive his or her payroll funds from his or her employer (3) Scrip prohibited No employer or agent or officer thereof shall issue in payment of wages due, or wages to become due an employee, or as an advance on wages to be earned by an employee any scrip, coupons, cards, or other things redeemable in merchandise unless such scrip, coupons, cards, or other things may be redeemed in cash when due, but nothing contained in this section shall be construed to prohibit an employer from guaranteeing the payment of bills incurred by an employee for the necessities of life or for the tools and implements used by such employee in the performance of his or her duties This survey is not does not provide legal advice or attempt to address the numerous issues that may arise when paying employees their wages Payment of wages - pay statement - record retention - tip notification

5 (4) Every employer shall at least monthly, or at the time of each payment of wages or compensation, furnish to each employee an itemized pay statement in writing showing the following: (a) Gross wages earned; (b) All withholdings and deductions; (c) Net wages earned; (d) The inclusive dates of the pay period; (e) The name of the employee or the employee's social security number; and Delaware G Analysis: The wage payment statute permits direct deposit to a bank account designated by the employee upon written request from the employee The regulations expressly permit mandatory payroll card programs provided certain conditions are met It follows that employers may give employees the choice between direct deposit and payroll cards, so long as employees who elect direct deposit make the designation in writing Earning Statements: Covered employers must provide their employees with a statement of earnings and deductions at the time of wage payment The statute expressly permits electronic delivery so long as the electronic statement is in a form capable of being retained by the employee 5 (f) The name and address of the employer Delaware Code, Title 19 Labor 1102 Payment of wages on regular paydays (a) Every employer shall pay all wages due to the employer's employees on regular paydays designated in advance by the employer, which shall be at least once during each calendar month, and in lawful money of the United States or checks provided suitable arrangements are made by the employer for cashing such checks for the full amount of the wages due at a bank or other business establishment convenient to the place of employment But upon written request of an employee, an employer may pay such employee all wages due by credit to a bank account designated by the employee 1108 Duty of employer regarding notification, posting and records It shall be the duty of every employer of over 3 employees to: This survey is not does not provide legal advice or attempt to address the numerous issues that may arise when paying employees their wages

6 The employee may request that the statement be provided in written form on a separate slip (4) Furnish to each employee at the time of payment a statement, either on the check, or by a separate slip, or electronically, so long as the electronic statement is in a form capable of being retained by the employee, showing the wages due, the pay period for which the wages are due and the total amount of deductions, separately specified, which have been made from the wages due, provided such statement shall, for an employee who is paid at an hourly rate, show the total number of hours for the said pay period Where the statement is furnished electronically, an employee may request that the statement be provided in written form on a separate slip Delaware Regulations Section 10 Definitions 15 Direct Deposit means automatic deposit of wages or benefits into an employee's bank account 17 Functional Equivalent means a change in the form of the payment of wages without impacting the substantive rights or value of the employee's wages For example, a debit card in lieu of cash, check, or credit must provide the full amount of wages without cost to the employee on the regular payday 18 Payroll Debit Card is a card that provides an employee with the appropriate means of obtaining all wages earned in a defined pay period in a form that is the equivalent of payment by cash, check, or direct deposit This survey is not does not provide legal advice or attempt to address the numerous issues that may arise when paying employees their wages 6

7 Section 20 Payroll Debit Card in Lieu of Cash or Check Florida Y Analysis: Section of the Florida Statutes was amended in June 2009 to expressly recognize payroll debit cards as an acknowledgement of indebtedness and permit their use if certain conditions are met Section permits the deposit of wages directly into an employee s account in a financial institution designated by the employee, if the employee has designated the financial institution and authorized the deposit in writing o Prior to the June 2009 amendment of section 53201, representatives of Florida s Agency of Workforce Innovation (AWI) informally suggested that, under section 53204, an employer may be able to make consent to direct deposit a condition of hire for new employees o The statute expressly prohibits employers from terminating an employee for refusing to authorize direct deposit Although section was not amended in 7 Delaware's Wage Payment & Collection Act requires the payment of wages to employees in lawful money or checks payable on demand, "provided suitable arrangements are made by the employer for cashing such checks for the full amount of the wages due at a bank or other business establishment convenient to the place of employment Employers may comply with this requirement by issuing a payroll debit card which provides the functional equivalent of cash or a check It is the employers' responsibility to effectuate a payroll debit card system which will allow full payment of wages on the employee's regular payday and without cost to the employee Employers may use a pre-paid debit card or general payroll fund account to establish suitable arrangements for converting wages into employee's disposable income Florida Statutes, Chapter 532 Devices Issued in Payment for Labor Payment by check, draft, or other order for payment Any order, check, draft, note, memorandum, payroll debit card, or other acknowledgment of indebtedness issued in payment of wages or salary due or to become due must be negotiable and payable in cash, on demand, without discount, at some established place of business in the state, the name and address of which must appear on the instrument or in the payroll debit card issuing materials, and at the time of its issuance, and for a reasonable time thereafter, which must be at least 30 days, the maker or drawer must have sufficient funds or credit, arrangement, or understanding with the drawee for its payment Payment by other device Any person issuing coupons, punch-outs, tickets, tokens, or other device in lieu of cash as payment for labor, whether redeemable either wholly or partially in goods or merchandise, at the person's or any other place of business, shall, on demand of any legal This survey is not does not provide legal advice or attempt to address the numerous issues that may arise when paying employees their wages

8 June 2009, it is possible that the AWI or a court holder thereof: still would consider payroll cards to be a form of direct deposit and, therefore, require payroll cards to satisfy both the requirements of section and section o If that is the case, employers would be required to obtain written authorization from current employees before using payroll debit cards as a method of wage payment o Based on the language of section and the AWI s earlier informal interpretation, it is likely that an employer could require new hires to receive wages by payroll debit card o This is consistent with Florida case law holding that terms of employment which require employee consent may be made a condition of hire or employment for at-will employees See, eg, Open Magnet Imaging, Inc v Nievess-Garcia, 826 So2d 415 (Fla 3 rd DCA 2002) (non-compete agreement) Earning Statements: Florida does not require employers to provide earning statements Employers that provide earning statements may select the method of delivery (1) Be liable for the full face value thereof in current money of the United States, on or after the 30th day succeeding the day of issuance (2) Be liable for payment in current money of the United States, notwithstanding any contrary stipulation or provision, which may be therein contained (3) Be subject to suit brought thereon in any court of competent jurisdiction, upon failure to comply with either subsection (1) or subsection (2), wherein any legal holder's recovery shall include the full face value of any such device, with legal interest from demand and, in the court's discretion, 10 percent of said amount as attorney's fees in the same suit Payment by direct deposit of funds (1) None of the provisions of this chapter shall be deemed or construed to prohibit the payor of wages or salary from causing the amount of such wages or salary to be deposited directly to the account of the payee in a financial institution by electronic or other medium if such direct deposit has been authorized in writing by the payee and if the payee has designated in writing the financial institution of her or his choice in which such deposit is to be made However, at the time the order for payment of such direct deposit is received by the drawee, the payor of such wages or salary must have sufficient funds or credit or an arrangement or understanding with the drawee for payment thereof 8 (2) No employer or payor of wages or salary shall terminate the employment of any employee or payee solely for refusing to authorize such direct deposit of wages or salary (3) An employee or payee of wages or salary may bring a civil action against any person violating subsection (2) Upon rendition of a judgment or decree by any of the courts of this state against the person violating subsection (2) and in favor of the employee or This survey is not does not provide legal advice or attempt to address the numerous issues that may arise when paying employees their wages

9 payee of wages or salary, the trial court, or, in event of an appeal in which the employee or payee prevails, the appellate court, shall adjudge or decree against the person violating subsection (2) and in favor of the employee or payee a reasonable sum as fees for the employee's or payee's attorney prosecuting the suit in which the recovery is had The court may, in its discretion, provide such equitable relief as it deems necessary or proper, including enjoining the defendant from further violation of subsection (2) If it appears to the court that the suit brought by the plaintiff was illfounded or brought for purposes of harassment, the plaintiff shall be liable for reasonable attorney's fees incurred by the defendant When so awarded, attorney's fees shall be included in the judgment or decree rendered in the case Indiana G Analysis: The state wage payment statute expressly permits electronic transfer to a financial institution designated by the employee Under the Regulation E Staff Commentary, an employee is allowed to designate the financial institution when he or she is given the choice between direct deposit and payroll cards Also, The Indiana Department of Labor has posted an enforcement position on its website stating that an employer may mandate direct deposit The IDOL also takes the position that payroll cards are a permissible method of wage payment Accordingly, it follows that an employer may mandate the choice between direct deposit and payroll cards Earning Statements: Employers subject to the minimum wage law must provide employees with a 9 Indiana Statutes, Chapter 2 Minimum Wage Statement of hours and wages; furnishing employees; posting law Sec 8 Every employer subject to the provisions of this chapter or to any rule or order issued under this chapter shall furnish to each employee a statement of the hours worked by the employee and the wages paid to him listing deductions made each pay period, and the employer shall furnish the commissioner upon demand a sworn statement of the same Such records shall be open to inspection by the commissioner, his deputy, or any authorized agent of the department at any reasonable time Indiana Statutes, Chapter 4 Regulation of Wage Payment Financial institution defined; payment; void contracts; exceptions Sec 1 (a) As used in this section, financial institution means a financial institution regulated by an agency of the United States or any state (b) Every corporation, limited liability company, association, This survey is not does not provide legal advice or attempt to address the numerous issues that may arise when paying employees their wages

10 statement of wages and deductions each pay period company, firm, or person engaged in Indiana in mining coal, ore, or other mineral, quarrying stone, or in manufacturing iron, steel, The statutes and regulations do not address permissible methods of delivery lumber, staves, heading barrels, brick, tile, machinery, agricultural or mechanical implements, or any article of merchandise shall pay The Agency takes the position that electronic each employee of the corporation, limited liability company, delivery is permissible if certain conditions are company, association, firm, or person, if demanded, at least every met two (2) weeks, the amount due the employee for labor The payments shall be made in lawful money of the United States, by negotiable check, draft, or money order, or by electronic transfer to the financial institution designated by the employee (c) Any contract in violation of this section is void This section does not apply where employees and employers by mutual agreement or contract have provided for payments on a weekly basis Indiana Statutes, Chapter 5 Frequency of Wage Payment Payment; voluntarily leaving employment Sec 1 (a) Every person, firm, corporation, limited liability company, or association, their trustees, lessees, or receivers appointed by any court, doing business in Indiana, shall pay each employee at least semimonthly or biweekly, if requested, the amount due the employee The payment shall be made in lawful money of the United States, by negotiable check, draft, or money order, or by electronic transfer to the financial institution designated by the employee Any contract in violation of this subsection is void Indiana Department of Labor * * * * * This survey is not does not provide legal advice or attempt to address the numerous issues that may arise when paying employees their wages 10

11 Wage and Hour, Frequently Asked Questions 1 Can an employer require an electronic direct deposit? Yes Indiana Code (a) states, Every person, firm, corporation, limited liability company, or association, their trustees, lessees, or receivers appointed by any court, doing business in Indiana, shall pay each employee at least semimonthly or biweekly, if requested, the amount due the employee The payment shall be made in lawful money of the United States, by negotiable check, draft, or money order, or by electronic transfer to the financial institution designated by the employee Any contract in violation of this subsection is void Can an employer fire an employee for not participating in direct deposit? Should an employee be terminated because she/he refused to participate in an electronic transfer program, the Indiana Department of Labor has no authority to take action Whether the employee would have recourse through private action in the state courts is questionable Generally, employment relationships in Indiana which are not governed by a written contract are at-will, which means any party can end the relationship for any reason However, the courts have created certain exceptions to that doctrine based on public policy An employee who wishes to explore whether or not that doctrine would provide him or her with protection from such action should consult with his or her personal attorney May an employer provide pay statements to its employees electronically? Yes Indiana Code requires employers to 1 The Indiana Department of Labor, Wage and Hour FAQs are located at 11 This survey is not does not provide legal advice or attempt to address the numerous issues that may arise when paying employees their wages

12 provide employees with statements of their hours worked, wages paid, and deductions listed However, the method of provision is not specified Therefore, in and of itself, an electronic method would not violate Indiana s wage and hour statutes However, certain criteria must be met The information provided to the employees must include a list of any and all deductions taken out of each payment, in addition to the hours worked and wages earned The employer must make the information readily accessible To guarantee compliance with Indiana s wage and hour laws, it is imperative that the employees have access to the company s computers and printers on company time It is the employer s obligation to provide the employees with the requisite wage and hour statements Regarding accessibility, Indiana law also requires all employers to be able to provide the commissioner of labor, or any of his agents, with those records Such records, by statute, shall be open to inspection by the commissioner at any reasonable time Provided that the employees statements include the required information - wages earned, hours worked, and deductions - and provided that the employer continues to keep the records accessible both for all employees, and for the Department s review, an employer would remain in compliance with Indiana s labor laws regarding payment statements * * * * * July 10, 2003 Opinion Letter from the A Peter Rimsans, then Deputy Commissioner, Wage and Hour Division 2 The July 2003 also included a statement suggesting that if an employee refuses electronic transfer of wages, the employer must utilize another method of wage payment The Department has since posted a statement on its website that direct deposit may be mandated Moreover, nothing in the statute supports the conclusion that electronic wage payment must be voluntary - the only statutory requirement is that the employee designate the financial institution 12 This survey is not does not provide legal advice or attempt to address the numerous issues that may arise when paying employees their wages

13 It is the position of our department that both Personal Identification Number (PIN) based "bank account" and PIN based "stored value" debit cards may meet the standard of "cash or negotiable check" provided each debit card is attached to a true FDIC insured bank account and the card is enabled to dispute the full balance of the employee's net wages without further deduction for banking fees That is to say, at least once each pay period, the employee should be able to access all of their wages in cash without being charged a fee by the bank maintaining the individual or master account It should be noted that Indiana law does not allow an employer to deduct such a fee from the employee wages We would also note that the "bank account' debit card may have additional imitations under the electronic transfer provisions of the statute Note: Since the letter was issued, the Department has advised that it does not have authority to issue opinion letters and that this letter should not take the place of independent legal counsel The Department does not object to the use of payroll cards as a permissible method of wage payment 2 Iowa Y Analysis: The statute expressly permits mandatory direct deposit for employees hired on or after July 1, 2005 The Agency has posted an enforcement position on its website stating that payroll cards are a permissible method of wage payment if certain conditions are met If an employer may mandate direct deposit for Iowa Code, Chapter 91A Wage Payment Collection 91A3 Mode of payment 1 An employer shall pay all wages due its employees, less any lawful deductions specified in section 91A5, at least in monthly, semimonthly, or biweekly installments on regular paydays which are at consistent intervals from each other and which are designated in advance by the employer However, if any of these wages due its employees are determined on a commission basis, 3 In an informal conversation with the Iowa Workforce Development, the Agency could not identify any flaws in this analysis 13 This survey is not does not provide legal advice or attempt to address the numerous issues that may arise when paying employees their wages

14 employees hired on or after July 1, 2005, it follows that an employer may mandate the choice between direct deposit and other permissible methods of wage payment (such as payroll cards) for the same employees 3 the employer may, upon agreement with the employee, pay only a credit against such wages Earning Statements: Each payday, an employer must provide employees with a statement of wages and deductions The employer may deliver the statement electronically so long as it provides employees with free and unrestricted access to a printer to print the statement 2 The wages paid under subsection 1 shall be paid in United States currency or by written instrument issued by the employer and negotiable on demand at full face value for such currency, unless the employee has agreed in writing to receive a part of or all wages in kind or in other form 3 a The wages paid under subsection 1 shall be paid at the employee's normal place of employment during normal employment hours or at a place and hour mutually agreed upon by the employer and employee, or the employee may elect to have the wages sent for direct deposit, on or by the regular payday of the employee, into a financial institution designated by the employee Upon written request by the employee, wages due may be sent to the employee by mail The employer shall maintain a copy of the request for as long as it is effective and for at least two years thereafter An employee hired on or after July 1, 2005, may be required, as a condition of employment, to participate in direct deposit of the employee's wages in a financial institution of the employee's choice unless any of the following conditions exist: (1) The costs to the employee of establishing and maintaining an account for purposes of the direct deposit would effectively reduce the employee's wages to a level below the minimum wage provided under section 91D1 (2) The employee would incur fees charged to the employee's account as a result of the direct deposit (3) The provisions of a collective bargaining agreement mutually agreed upon by the employer and the employee organization prohibit the employer from requiring an employee to sign up for 4 A copy of the Frequently Asked Workplace Wage Questions are located at 14 This survey is not does not provide legal advice or attempt to address the numerous issues that may arise when paying employees their wages

15 direct deposit as a condition of hire This survey is not does not provide legal advice or attempt to address the numerous issues that may arise when paying employees their wages 15 91A6 Notice and recordkeeping requirements 3 Within ten working days of a request by an employee, an employer shall furnish to the employee a written, itemized statement or access to a written, itemized statement as provided in subsection 4, listing the earnings and deductions made from the wages for each pay period in which the deductions were made together with an explanation of how the wages and deductions were computed 4 On each regular payday, the employer shall send to each employee by mail or shall provide at the employee's normal place of employment during normal employment hours a statement showing the hours the employee worked, the wages earned by the employee, and deductions made for the employee However, the employer need not provide information on hours worked for employees who are exempt from overtime under the federal Fair Labor Standards Act, as defined in 29 CFR pt 541, unless the employer has established a policy or practice of paying to or on behalf of exempt employees overtime, a bonus, or a payment based on hours worked, whereupon the employer shall send or otherwise provide a statement to the exempt employees showing the hours the employee worked or the payments made to the employee by the employer, as applicable An employer who provides each employee access to view an electronic statement of the employee's earnings and provides the employee free and unrestricted access to a printer to print the employee's statement of earnings, if the employee chooses, is in compliance with this subsection * * * * * Iowa Workforce Development, Frequently Asked Workplace

16 Wage Questions: 4 Q Can my employer require me to have direct deposit of my wages? A Your employer may require direct deposit of your wages if: You were hired after July 1, 2005 You are allowed to choose the bank or credit union The costs of opening and keeping the account do not drop your pay below minimum wage There is no charge to your account for the direct deposit; and You are not covered by a union contract that prohibits mandatory direct deposit Q Is payment of wages by debit card allowed in Iowa? A Yes, if the following conditions are met: 1 The employee agrees in writing to accept wages through a debit card 2 The funds must be available to the employee on or before each pay day 3 The employee must be allowed access to all wages due without a fee or charge The number of free transactions required per pay period will varying depending on the amount of pay owed and the card's transaction limit For example, if the card's transaction limit is greater than the amount of pay owed, only one free transaction per pay period is required; if the card's transaction limit is one - half of the wages owed, two free transactions per pay period are required 16 Q Is my employer supposed to give me a time sheet or check stub? A Yes Every regular payday, an employer must provide to the employee (by mail, or at the employee's normal place of work, or at a mutually agreed upon place and hour) during normal working hours, a statement showing: the hours the employee worked; the wages earned by the employee; and This survey is not does not provide legal advice or attempt to address the numerous issues that may arise when paying employees their wages

17 the deductions made from that paycheck It is acceptable for an employer to provide each employee access to view an electronic statement of the employee's earnings, so long as the employee has free and unrestricted access to a printer to print the statement, if the employee chooses Kansas G The wage payment statute expressly permits the use of payroll cards if certain conditions are met Earning Statements: Upon request, an employer must provide an employee with an itemized statement of deductions The statutes and regulations do not address permissible methods of delivery The Agency has informally advised that electronic delivery is permissible provided: o Employees are given a way to access and print the information while at work at no cost, and o If the employee does not have access to a computer during the day, the employer must print a copy and deliver it to the employee Kansas Statutes, Article 3 Payment of Compensation Pay periods; Payment methods (a) Every employer shall pay all wages due to the employees of the employer at least once during each calendar month, on regular paydays designated in advance by the employer (b) The employer may designate the method by which employees receive wages, provided all wages shall be paid by one or more of the following methods: (1) In lawful money of the United States; (2) by check or draft which is negotiable in the community wherein the place of employment is located; (3) by electronic fund transfer or deposit to an automated clearinghouse member financial institution account designated by the employee; or (4) by payroll card (c) Any employer that elects to pay wages only by a method authorized in subsection (b)(3) shall offer an alternative payment method as a default option for employees that fail to designate a financial institution account for electronic fund transfer or deposit 17 (d) Any employer that elects to pay wages using a payroll card as authorized in subsection (b)(4) shall allow employees at least one This survey is not does not provide legal advice or attempt to address the numerous issues that may arise when paying employees their wages

18 means of fund access withdrawal per pay period at no cost to the employee for an amount up to and including the total amount of the employee's net wages, as stated on the employee's earnings statement (e) Not less than 30 days prior to implementing a payroll program using only the methods authorized in subsection (b)(3) or (b)(4), an employer shall either: (f) (1) Conduct one or more employee forums to educate employees regarding the use of a direct deposit or payroll card program offered by the employer; or (2) distribute educational information to employees about direct deposits or payroll cards as they may be used under the payroll card program offered by the employer (1) Employers shall retain no interest in wages paid by electronic funds transferred to an employee's payroll card account, other than the right to correct inadvertent overpayments in accordance with the rules governing direct deposit (2) An employer may not charge an employee initiation, loading or other participation fees to receive wages payable in an electronic fund transfer to a payroll card account, with the exception of the cost required to replace a lost, stolen or damaged payroll card (g) As used in this section: This survey is not does not provide legal advice or attempt to address the numerous issues that may arise when paying employees their wages 18 (1) "Payroll card" means a card, issued to an employee by an employer, a bank or other entity on behalf of an employer,

19 onto which an employee's net wages are loaded on regular paydays from a payroll card account and made accessible to an employee A payroll card is a machine readable instrument for purposes of KSA d, and amendments thereto (2) "Payroll card issuer" means an employer, a bank or other entity that issues a payroll card to an employee under an employer payroll card program (3) "Payroll card account" means an account into which an employer deposits each participating employee's net wages on regular paydays through an electronic fund transfer (h) The end of the pay period for which payment is made on a regular payday shall be not more than 15 days before such regular payday unless a variance in such requirement is authorized by state or federal law Notification to employees Each employer shall: (d) Furnish each employee, upon request by such employee, with an itemized statement of deductions made from his wages under KSA for each pay period such deductions are made Kentucky G Analysis: The state attorney general takes the position that direct deposit may be mandated so long as employees are able to access their full pay without fees The Kentucky Labor Cabinet has adopted the Attorney General's position on its website The Kentucky Labor Cabinet also has advised 19 Kentucky Statutes, Chapter 337 Wage and Hour Definitions for chapter and specific ranges in chapter (1) As used in this chapter, unless the context requires otherwise: This survey is not does not provide legal advice or attempt to address the numerous issues that may arise when paying employees their wages

20 informally that payroll cards are an acceptable method of wage payment and may be mandated provided employees have access to all of their wages without fees It follows that employers may mandate the choice between payroll cards and direct deposit so long as employees are not charged a fee for accessing their wages Earning Statements: An employer with 10 or more employees must furnish its employees with a statement of deductions upon payment of wages The statutes and regulations do not address permissible methods of delivery The Agency has informally advised that electronic delivery is permissible if the statement contains all of the required information and may be printed by the employee This survey is not does not provide legal advice or attempt to address the numerous issues that may arise when paying employees their wages 20 (c) Wages includes any compensation due to an employee by reason of his employment, including salaries, commissions, vested vacation pay, overtime pay, severance or dismissal pay, earned bonuses, and any other similar advantages agreed upon by the employer and the employee or provided to employees as an established policy The wages shall be payable in legal tender of the United States or checks on banks convertible into cash on demand at full face value, subject to the allowances made in this chapter; Employer to furnish employee with statement of deductions All employers who employ ten (10) or more and pay their employees by check or otherwise, making deductions from the salaries and wages due said employees, shall state specifically the amount for which the deductions are made, and each such employer at the time of payment of salary or wage to each employee shall furnish the employee a statement giving the amount of each deduction and the general purpose for which the deduction is made * * * * * Kentucky Attorney General Opinion No (November 30, 1983) The Attorney General disapproved a mandatory direct deposit program where employees were charged a monthly service charge if they failed to maintain a minimum balance in their account The Attorney General stated: We have previously issued OAG which authorized a bank deposit plan But, there, the employee could draw one free check per month up to the total mount of his take-home pay

21 It seems that the plan now under discussion requires the employee to pay a fee to the bank should he wish to withdraw his entire pay check, since he would have less than a minimum balance in said bank at the end of the month This would be accomplished without the employee's express authorization To that extent, the plan would violate KRS (1), , and Criminal penalties are attached to such violations Therefore, in our opinion, the present plan is illegal, because the employee is not receiving his full pay, but must pay a charge to the bank in order to obtain his entire pay for the affected period * * * * * Kentucky Labor Cabinet, Office of Workplace Standards, Frequently Asked Questions 5 May my employer require direct deposit for every employee? Your employer can require direct deposit so long as you have the ability to withdraw your entire net pay without having to pay a fee to the financial institution Louisiana G Louisiana does not regulate method of wage payment The state defers to the federal Fair Labor Standards Act with respect to most wage and hour issues None applicable Earning Statements: Louisiana does not require employers to provide earning statements Employers that provide earning statements may 5 The Frequently Asked Questions are located at 21 This survey is not does not provide legal advice or attempt to address the numerous issues that may arise when paying employees their wages

22 select the method of delivery Maine G The state wage payment statute expressly permits mandatory payroll card programs if certain conditions are met Earning Statements: With each wage payment, an employer subject to the minimum wage provisions must provide employees with a statement of earnings and itemized deductions The statute permits electronic delivery provided employees have ready access to the information and may print the statement without cost This survey is not does not provide legal advice or attempt to address the numerous issues that may arise when paying employees their wages 22 Maine Revised Statutes, Title 26 Labor & Industry, Chapter 7 Employment Practices 663 Definitions Terms used in this subchapter shall be construed as follows, unless a different meaning is clearly apparent from the language or context: 5 Wages Wages paid to any employee includes compensation paid to the employee in the form of legal tender of the United States and checks on banks convertible into cash on demand and includes the reasonable cost to the employer who furnishes the employee board or lodging Wages also includes compensation paid through a direct deposit system, automated teller machine card or other means of electronic transfer as long as the employee either can make an initial withdrawal of the entire net pay without additional cost to the employee or the employee can choose another means of payment that involves no additional cost to the employee; 665 Powers and duties of commissioner 1 Examination of records, books; copies Every employer subject to this subchapter shall keep a true and accurate record of the hours worked by each employee and of the wages paid, such records to be preserved by the employer for a period of at least 3 years, and shall furnish to each employee with each payment of wages a statement that clearly shows the date of the pay period, the hours, total earnings and itemized deductions An employer making payment by direct deposit or other means of electronic

23 transfer shall provide each employee with an accurate record of the transfer, including the date of the pay period, the hours, total earnings and itemized deductions, when the transfer is made If the record is provided in an electronic format the employer shall provide a method by which the employee may have ready access to the information and print it without cost to the employee Massachusetts G Analysis: The state Division of Banks has issued two opinion letters stating that an employer may mandate direct deposit so long as the employee may designate the bank In rendering its opinions, the Division relied heavily on a regulation stating that compliance with Federal Reserve Regulation E and its official staff commentary will be deemed compliance with the state's electronic fund transfer provision in the absence of a direct conflict Under the Revised Official Staff Commentary to Regulation E, an employer may comply with Regulation E by giving employees the choice between direct deposit and payroll cards It follows that an employer may comply with Massachusetts law by giving employees the same choice In addition, although the Massachusetts Office of Attorney General does not have authority to render legal opinions to private individuals, it has informally suggested that providing employees the choice between payroll cards and direct deposit would be permitted provided employees who select payroll cards may: o Revert to direct deposit, and 23 Massachusetts General Law, Chapter 149 Labor and Industries 148 Payment of wages; commissions; exemption by contract; persons deemed employers; provision for cashing check or draft; violation of statute An employer, when paying an employee his wage, shall furnish to such employee a suitable pay slip, check stub or envelope showing the name of the employer, the name of the employee, the day, month, year, number of hours worked, and hourly rate, and the amounts of deductions or increases made for the pay period Every railroad corporation shall furnish each employee with a statement accompanying each payment of wages listing current accrued total earnings and taxes and shall also furnish said employee with each such payment a listing of his daily wages and the method used to compute such wages No person shall by a special contract with an employee or by any other means exempt himself from this section or from section one hundred and fifty This survey is not does not provide legal advice or attempt to address the numerous issues that may arise when paying employees their wages

24 o Access their entire pay without charge at a location reasonably near the workplace Earning Statements: Upon payment of wages, an employer must provide its employees with a statement of earnings and deductions The statute does not address electronic delivery The Agency has informally advised that electronic delivery is permitted so long as employees have access to a printer and may print the statement Any employer paying wages to an employee by check or draft shall provide for such employee such facilities for the cashing of such check or draft at a bank or elsewhere, without charge by deduction from the face amount thereof or otherwise, as shall be deemed by the attorney general to be reasonable The state treasurer may in his discretion in writing exempt himself and any other public officer from the provisions of this paragraph Whoever violates this section shall be punished or shall be subject to a civil citation or order as provided in section 27C A Notification of deductions Every person making a deduction from wages of any employee for social security, unemployment compensation benefits, pension, vacation or health and welfare funds, state taxes, federal taxes, dues check-off and credit unions and every person engaged in contracting or sub-contracting, highway or building construction projects or public works construction who is party to an agreement to make contributions for unemployment compensation benefits, pension, vacation or health and welfare funds, apprentice training programs, federal tax, state tax, dues check-off or contributions to a credit union for the benefit of any employee, or who is required to make such contributions to such funds or programs or payments directly to an employee under the provisions of section twenty-seven, and which contributions or payments are computed on an hourly, daily, weekly or monthly basis, shall furnish each such employee a suitable pay slip, check stub or envelope, notifying such employee of the amount of each such deduction or contribution at the time of the payment of wages from which such deduction is made and in the case of a contribution at the time when such contribution is made; provided, however, that a new employee shall be notified in writing at the time of the first payment of his wages about the nature of such deduction or contribution; and provided, further, that each such employee shall be notified in writing at the initial time of any new deduction or contribution from the wages about the nature of such deductions This survey is not does not provide legal advice or attempt to address the numerous issues that may arise when paying employees their wages

25 and contributions Massachusetts General Law, Chapter 167B Electronic Branches and Electronic Fund Transfers 7 Prohibitions No person may: (1) condition the extension of credit to a consumer on such consumer's repayment by means of preauthorized electronic fund transfers; (2) require a consumer to accept an electronic fund transfer service or to establish an account for receipt of electronic fund transfers with a financial institution as a condition of employment or receipt of a government benefit; provided, however, that where a consumer's account is to be credited by a preauthorized electronic fund transfer, the consumer shall have the choice of selecting the financial institution to which the transfer shall be made if such institution is technically capable of receiving such a transfer; or (3) condition the sale of goods or services to a consumer on such consumer's payment by means of an electronic fund transfer * * * * * Massachusetts Division of Banks, Opinion Letter No Excerpt: 25 the Division's regulations governing electronic fund transfers, 209 CMR 3100 et seq provide that compliance with any provision of the Federal Electronic Fund Transfers Act, the Board's Regulation E, official Board interpretations and official staff interpretations, which does not conflict with GL c 167B and 209 CMR 3100 or an advisory ruling of the Commissioner, shall be deemed to be compliance with GL c 167B " As noted in Opinion , the Division reviewed 12 CFR 20510(e)(2), a This survey is not does not provide legal advice or attempt to address the numerous issues that may arise when paying employees their wages

26 comparable provision of said Regulation E The Official Staff Commentary for this section of Regulation E states that "A financial institution (as an employer) may not require its employees to receive their salary by direct deposit to that same institution or to any other particular institution An employer may require direct deposit of salary by electronic means if employees are allowed to choose the institution that will receive the direct deposit Alternatively, an employer may give employees the choice of having their salary deposited at a particular institution, or receiving their salary by check or cash" (emphasis supplied) Upon review of the above provisions of Federal Regulation E and Official Staff Commentary thereto, it is the position of the Division that an employer may require direct deposit of salary by electronic means if employees are allowed to choose the institution that will receive the direct deposit This practice is specifically listed as permissible in the Official Staff Commentary and compliance with this provision will be deemed to be compliance with Massachusetts General Laws chapter 167B This survey is not does not provide legal advice or attempt to address the numerous issues that may arise when paying employees their wages 26 Massachusetts Division of Banks, Opinion Letter No Excerpt: Your letter requests clarification as to whether any employer may require direct deposit as long as the employees can choose the financial institution that will receive the direct deposit or does such provision extend only to financial institutions, as employers The Division issued an opinion to a state-chartered savings bank dated March 4, 1997 (Opinion #97-013) stating that the bank, as an employer, may require direct deposit of salary if employees are allowed to choose the institution that will receive the direct deposit This position is consistent with the applicable provision of Federal Regulation E (See 12 CFR 20510(e)(2)) and the Official Staff Commentary, the 1997 version of which was cited in the Opinion The applicable provision, paragraph 10(e)(2), of Federal Regulation E has not been amended since 1997 However, the