Can Employers in Minnesota Pay Wages With Payroll Card Accounts?
Yes. A payroll card account is an account to which an employer can electronically transfer funds and the employee can access the funds using a card similar to a debit card. Minnesota law permits employers to pay wages with payroll card accounts provided that certain conditions are satisfied. The primary conditions that apply are as follows:
Filing with Commissioner of Labor and Industry: An employer who issues payroll card accounts must file a notice with the Commissioner of Labor and Industry stating: (i) the employer’s true name; (ii) any other names under which the employer conducts business; (iii) the employer’s address, which may not be a post office box; and (iv) the employer’s telephone number.
Ownership and Availability of Wages: Any and all wages paid with a payroll card account must be owned by the employee and available for withdrawal on and after the employee’s regular payday. The transaction must be free to the employee.
Written Disclosure: The employer must provide a written disclosure to the employee stating all of the employee’s wage payment options. The disclosure must state all terms and conditions of the payroll card account and identify any fees that may be charged to the account.
Written Consent: An employer may pay an employee with a payroll card account only after the employee has provided his or her written consent. Consent to payment through a payroll card account cannot be required as a condition of employment.
Monthly Statements: Upon the employee’s request, the employer must provide one free transaction history to the employee each month that identifies all deposits, withdrawals, deductions, or charges for the employee’s payroll card account.
Change of Wage Payment Method: At any time, an employee may request to be paid his or her wages through any other method allowable at law. The employer must begin paying the employee his or her wages through the requested method within 14 days.
Takeaway: Payroll card accounts can help employers reduce their costs for payroll processing. However, they can only be used if the employee consents and if all requirements of the statute are satisfied.