Overview. On March 27, Kentucky Governor, Matt Bevin, signed a measure (H.B. 378) amending KRS 337.010 to update the ways that an employee may receive wages and prohibit activation fees for wages on a debit card. The law will permit the use of payroll cards and direct deposit as forms of wage payment and is to take effect 90 days after the legislature adjourns. The Kentucky Legislature is scheduled to end its session on March 30, 2017. These requirements are set forth below.
Effective Date. The measure is expected to take effect June 29, 2017.
Details. KRS 337.010 is amended to read as follows:
"Wages" includes any compensation due to an employee by reason of his or her employment, including salaries, commissions, vested vacation pay, overtime pay, severance or dismissal pay, earned bonuses, and any other similar advantages agreed upon by the employer and the employee or provided to employees as an established policy. The wages shall be payable in legal tender of the United States, checks on banks, direct deposits, or debit cards convertible into cash on demand at full face value, subject to the allowances made in this chapter. However, an employee may not be charged an activation fee or any other fee to access wages if a debit card is used for wages.
Additionally, H.B. 378 amended KRS 337.070, to provide that a statement of wages may be paper or electronic as long as employees have access to a computer and printer.
KRS 337.070 is amended to read as follows:
All employers who employ ten (10) or more and pay their employees by check or otherwise, making deductions from the salaries and wages due said employees, shall state specifically the amount for which the deductions are made, and each such employer at the time of payment of salary or wage to each employee shall furnish the employee a paper or electronic statement giving the amount of each deduction and the general purpose for which the deduction is made. If an employer provides an electronic statement, then the employer shall provide access to a computer and printer for review and printing by the employee.
Call to Action. Employers should review current payroll practices and when implementing a payroll debit card program ensure it complies with the various requirements. Employers should coordinate arrangements with potential payroll debit card providers to ensure their offerings comply with the Kentucky requirements.
Employers providing electronic wage statements to their employees should ensure they provide access to a computer and printer.
Future Legislation. In recent years, lawmakers have become increasingly interested in the topic of payroll cards as this method of wage payment continues to become more popular with employees. Moving forward, we expect to see continued efforts from state and federal agencies to further regulate the various requirements of offering payroll debit cards as a method of wage payment.
If you have any questions regarding this Alert, please contact your Relationship Manager or Service Team.