Connecticut Authorizes Use of Paycards

In June, Connecticut Governor Dan Malloy signed Senate Bill 211 into law. This law allows employers to use paycards to pay wages to Connecticut employees as long as certain conditions are met. Previously, the Connecticut Department of Labor's position was such cards were not authorized under state law and could not be used.  The effective date of the new law is October 1, 2016.

money-256319_640Employees must have the option to receive wages by direct deposit and paper check. Connecticut employees must voluntarily authorize use of the payroll card in writing or electronically must be made without intimidation or coercion by the employer and without fear of reprisal.  The Act also prohibits an employer from requiring employees to accept wage payments through payroll cards and requires employers to pay wages by check or through direct deposit in lieu of payroll cards for employees who do not agree to payment via payroll cards.  It also cannot be a condition of employment.

 

The required notice must include the following information:

  1. that payment by means of payroll card is voluntary, and the employee can elect to be paid by direct deposit or negotiable check;
  2. the terms and conditions for the use of the payroll card, including an itemized list of any associated fees;
  3. the methods available for employees to access their wages and to avoid or minimize any fees for use of the payroll card;
  4. the methods available for employees to check their payroll card balances, without incurring any fees; and
  5. a statement that third parties may assess fees.

If you have any questions regarding the new Connecticut Paycard Law or providing a paycard solution for your employees, contact Coastal Payroll today at info@coastalpayroll.com