New York DOL Appeals Decision Invalidating Final Payroll Debit Card Regulations
Author: Rena Pirsos, XpertHR Legal Editor
May 22, 2017
The New York State Department of Labor (DOL) has filed an appeal in New York State Supreme Court (Reardon v. Global Cash Card and New York State Industrial Board of Appeals, Petition No. 02643-17, 4-17-17) of the decision that invalidated and revoked final DOL regulations governing payroll debit cards before they could go into effect this past March.
In its appeal, the DOL argues that because Global Cash Card (Global), the national payroll card provider that initially challenged the final regulations as burdensome and unreasonable, is not an employer subject to New York's wage payment law, it did not have the right to file a complaint with the New York Industrial Board of Appeals (the Board).
The DOL also disputes the Board's conclusion that the agency exceeded its authority because the final regulations placed restrictions on financial institutions that issue the cards. In addition, the agency claims that the Board usurped the DOL's authority to issue regulations without prior legislative action.
New York's wage payment law currently permits employers to pay employees using payroll debit cards subject to several requirements and limitations contained in a series of DOL Opinion Letters. The DOL issued the final regulations to clarify and supplement those Opinion Letters.
The final regulations would:
- Require New York employers to comply with additional notice and consent requirements, including a seven-day cooling-off period after obtaining an employee's consent;
- Require New York employers to ensure employees' full access to their pay at ATMs; and
- Prevent card issuers from charging fees to the employees for a variety of card-related services.
Global has until May 29 to respond to the DOL's appeal but a decision in the case will likely not come for several months. For now, employers are still permitted to pay employees' wages using payroll cards subject to the DOL's standing Opinion Letters.