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Payroll Debit Cards Ruling Called Setback for Workers

Fees on some payroll debit cards can effectively lower pay below minimum wage. (creative-commons-images.com)
Fees on some payroll debit cards can effectively lower pay below minimum wage. (creative-commons-images.com)
March 2, 2017

NEW YORK – Labor, consumer and good government groups are asking the state to appeal a decision throwing out rules for payroll debit cards.

About 13,000 businesses employing some 200,000 workers in New York pay those workers with debit cards. But some of those cards charge so many fees that workers can end up getting less than minimum wage.

The state Department of Labor instituted rules to protect workers from exploitation, but New York’s Industrial Board of Appeals (IBA) overturned them.

Andy Morrison, campaigns coordinator for the community support group New Economy Project, says that decision needs to be challenged.

"We're calling on New York state to stand firmly behind these strongest-in-the-nation rules,” he stresses. “The Department of Labor will have the opportunity to appeal and workers are counting on them to do so."

The IBA says the rules, which were scheduled to go into effect next week, were overturned because regulation of financial services products is outside the scope of labor law.

But Morrison maintains the board got it wrong, confusing a consumer product with what is really a worker justice issue.

"These wages, just because they're on a payroll card, doesn't mean that employers have any less responsibility to ensure that their workers are paid in full," he states.

More than half of New York workers being paid with payroll debit cards earn less than $30,000 a year.

Some employers say they like the cards because using them cuts down on their payroll costs. Morrison points out that even with the Department of Labor rules, they would still have that option.

"It's really a common sense set of rules that would limit the types of fees that workers could be charged, but it certainly doesn't ban or prohibit the use of payroll cards," he states.

Morrison adds that with the president and Congress rolling back worker protections on the federal level, having strong protections in New York is more important than ever.






Andrea Sears, Public News Service - NY