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Paycard Laws by State

Author: Alice Gilman

Paycards have emerged as another way to pay employees electronically in addition to direct deposit. A paycard is a special class of debit card on to which an employee's net wages are loaded by an employer. Federal Regulation E sets the overall rules for electronic payments.

Under Regulation E, an employer is prohibited from requiring employees to:

  • Receive their pay on a paycard; and
  • Use a particular paycard.

Regulation E requires an employer to:

  • Give employees the option to choose other wage payment methods; and
  • Fully disclose to employees the terms and conditions of its paycard program, including any fees.

State wage payment laws specify how an employee must be paid - in cash, or by check, direct deposit or paycard. At a minimum, most state wage payment laws adopt Regulation E's provisions, but some states provide additional protections for employees. For example, a state paycard law may require that the employer assume liability for fees the employer did not disclose to employees.

The following chart summarizes state requirements regarding wage payment by paycard and the penalties applicable to an employer that fails to comply with the law. Cells marked with "N/A" signify either that the state does not have a paycard law or that the issue in question does not apply under that state's law.

Due to its large size, this chart is presented in a pop-up overlay. To view the chart in full size, simply click anywhere on the thumbnail image below. Then navigate the chart by clicking and dragging. To close the chart, click on the "X" in the upper-right hand corner.