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BOSTON (State House News Service) - Two members of the Lawrence legislative delegation asked the Labor and Workforce Development Committee to recommend a bill that would codify a framework for the use of payroll cards, a payment method they said is common in low-income communities but can come with financial pitfalls.
Sen. Pavel Payano and Rep. Francisco Paulino said H 1931 would enshrine lawful money, electronic funds transfer or direct deposit, checks or payroll cards as acceptable payroll methods with provisions to ensure that employees receive their wages promptly and without incurring additional costs or fees.
Pay cards are popular among workers without access to direct deposit or banking, but "often come with hidden fees and conditions, leaving employees unaware of potential financial burdens," Payano said.
"In communities like Lawrence and many other Gateway Cities where many of our hardworking constituents live paycheck to paycheck, the manner in which they receive their wages can significantly impact their financial well-being," he said Tuesday. "While direct deposit may not be financially feasible for some due to associated fees, this bill recognizes the importance of offering diverse payroll options while safeguarding employee rights."
The bill would mandate regulations for employers offering pay cards as a payment option, including a plain-language, written disclosure outlining the terms and conditions of the payroll card, including associated fees. Employees would have to explicitly opt into a pay card payment and would have the ability to opt out.
"To me, I think that sounds like a no-brainer," Payano said.
Paulino said the bill "offers a clear path for employers and guarantee that every worker in our state can receive their wages in a manner most convenient to them." The bill would require that pay cards have at least one free means to withdraw up to the full balance on an employee card during each pay period at "a financial institution or other location convenient to the place of employment."
"The core of this bill is transparency and choice, and protection for our workers, while providing clear guidance to our employers who create those jobs," he said.
Written By Colin A. Young/SHNS
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