New York State Department of Labor Regulations Clarifying Wage Payment Methods by Employers are Revoked
The New York State Department of Labor (“NYSDOL”) regulations detailing acceptable methods of payment of wages by employers to their employees (including by payroll debit card), which were slated for a March 7, 2017 effective date, have been revoked. After a challenge by Global Cash Card, Inc., a payroll debit card vendor, the Industrial Board of Appeals held the regulations to be invalid because they exceed the Commissioner of Labor’s authority. The Commissioner of Labor can issue regulations necessary to carry out provisions of the New York State Labor Law (“NYSLL”), but cannot place restrictions on banks, which is what these regulations did. By requiring employers to provide access to automatic teller machines that allow employees to withdraw their wages without a fee, and prohibiting the imposition of other fees on the employee, the regulations are regulating banking services, which is beyond the Commissioner of Labor’s authority. NYSLL § 192 does not prohibit payment by payroll debit card as long as the employee consents, and it has always been illegal for an employer to require an employee to receive wages by payroll debit card. The regulations, however, went too far and imposed banking restrictions on employers, which is within the authority of the New York State Department of Financial Services and not the NYSDOL. As a result of this order, employers no longer have to provide their employees with the notice and consent documents the regulations required. Employers should be aware of the potential for the NYSDOL to attempt new regulations similarly dealing with payroll debit cards.
If you have any questions about compliance, or are unsure how this new enforcement initiative may impact your business, please contact the Labor & Employment attorney at Barclay Damon with whom you normally work or any attorney in our Labor & Employment Practice Area.