ALBANY -- Protections are now in place preventing low-wage workers from losing out on their money.
New York is requiring payroll-card companies to provide employees with access to at least one local fee-less ATM near their home or work, Gov. Andrew Cuomo announced Thursday.
In addition, account maintenance, overdraft and inactivity fees will be removed and employers will no longer receive financial benefits for paying their workers via a payroll card, Cuomo said.
Roughly 200,000 low-wage workers in New York are paid through payroll cards, which had contained withdrawal fees or charges for viewing account balances.
In many cases, the employees do not have a bank account and are required to pay ATM fees in order to withdraw their money, in addition to the initial card fees, Cuomo said.
“These tough new standards protect some of our most vulnerable New Yorkers from predatory practices that seek to deny them a fair day's pay for a fair day's work,” Cuomo said in a statement.
In 2013, Attorney General Eric Schneiderman’s office issued a report stating about 75 percent of workers paid via payroll card were being charged a fee to access their own money and were not properly informed of how they could avoid being charged the fees.
Employers, about 13,000 in New York alone, use payroll cards so that they can cut not only the costs of printing paychecks, but to also eliminate the possibility of an employee stealing the paycheck of another, state officials said.
The new regulations for payroll cards were first drafted in May by the state Department of Labor.
The regulations also require employers to provide workers with either a wage statement or a paystub for each pay cycle.
They must also maintain up-to-date records of workers’ length of employment, rates of pay, itemized deductions and any credits claimed by the employer, the state said.
“The regulations adopted today ensure a transparent process and protect workers from watching their hard-earned paychecks whittled away by hidden fees,” Department of Labor commissioner Roberta Reardon said in a statement.
Union leaders praised the move.
When methods of payroll payment actually take money from workers through fees, we see how much the entire system is based on various forms of wage theft,” Stuart Appelbaum, president of the Retail, Wholesale and Department Store Union, RWDSU, said in a statement.
For any questions or to file a complaint, New Yorkers can visit https://labor.ny.gov/workerprotection/laborstandards/ls_ContactUs.shtm