AB 687

Current law

Under current law, if an employer pays wages in a form other than cash, the

wages must be payable at the employer's office, if within the state, at any bank within

the state, or at a place of business within the county in which the work was

performed.

The bill

Payment of wages by payroll card.

This bill regulates the payment of wages

in the form of an electronic fund transfer to a payroll card account, which under

current regulations issued under the federal Electronic Fund Transfer Act, is defined

as an account that is directly or indirectly established through an employer and to

which electronic fund transfers of the consumer's wages, salary, or other employee

compensation (such as commissions) are made on a recurring basis, whether the

account is operated or managed by the employer, a third-party payroll processor, a

depository institution, or any other person (payment of wages by payroll card).

Employee consent required.

Specifically, the bill prohibits an employer from

paying an employee his or her wages by payroll card unless all of the following apply:

1. The employer obtains the employee's consent to receive his or her wages by

payroll card. That consent must be given knowingly and voluntarily and not as a

condition of employment, must be given before the performance of the work for which

the employee is receiving wages, and must be affirmed by a written or otherwise

verifiable record maintained by the employer.

2. The employer also offers the employee the option of receiving his or her wages

in cash, in the form of a check, or by means of direct deposit to a depository account

of the employee's choosing.

Disclosure requirements.

Before an employer may seek the consent of an

employee to receive his or her wages by payroll card, the employer must provide all

of the following information to the employee:

1. A plain-language description of the employee's options for receiving his or

her wages.

2. A statement of the terms and conditions governing the employer's payment

of wages by payroll card and the employee's use of a payroll card to access those

wages. That statement must include a clear, conspicuous, and easily understandable

list of all fees that may be charged to the employee and the amount of those fees.

Fees.

Under the bill, an employer may not pay an employee his or her wages

by payroll card unless the employer, if the employer itself issues payroll cards to its

employees, or a third-party processor, depository institution, or other person