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West Virginia enacts payroll card legislation

04/07/22

Author: ADP Admin/Tuesday, April 5, 2022/Categories: Compliance Corner

On March 23, 2022, Governor Jim Justice signed into law Senate Bill 245  (SB 245) eliminating the requirements that wage payment by payroll card and direct deposit be agreed upon in writing by both employer and employee.  The legislation becomes effective June 9, 2022.

The Details: 

SB 245 provides that employers must pay wages at least twice every month in a “manner of the person, firm, or corporation’s choosing.”  No more than 19 days are allowed between payments unless agreed to by the employee and employer. Wage payments may be made:

(1) In lawful money of the United States;

(2) By check or money order;

(3) By deposit or electronic transfer of immediately available funds into an employee’s payroll card account in a federally insured depository institution; or

(4) By direct deposit in a financial institution chosen by the employee

Where an employer uses payroll cards for employee wage payments, the employer must:

·       Provide a full written disclosure of any applicable fees associated with the payroll card.

·       Ensure that the employee has the ability to make at least one withdrawal or transfer from the payroll card per pay period without cost or fee to the employee.

·       Ensure that the employee has the ability to make in-network withdrawals or transfers from the payroll card without cost or fee to the employee for any amount contained on the card.

·       Allow an employee to choose to have their wages deposited into a financial institution of the employee’s choosing by the providing the employer with the name of the financial institution,  the type of account (e.g., checking or savings) and the account number. Should the employee fail to provide sufficient information to facilitate direct deposit, the employer may pay the employee wages owed by payroll card.

The law also separately addresses assignment of wages and wage payments to terminated employees.

Assignment of Wages

·       No assignment of or order for future wages may be valid for a period exceeding one year from the date of the assignment or order.

·       An assignment or order shall be in writing and must specify the total amount due.

·       Three-fourths of the periodical earnings or wages of the assignor (e.g., employee) are all times exempt from assignment or order.

Terminated employees

·       Wages owed must be paid via cash, direct deposit, payroll card or check by on or before the next regular payday on which the wages would otherwise be due.

·       Fringe benefit payments (e.g., vacation pay) are not due by the next regular payday but payable based on the agreement between the employer and the employee.

·       If the terminated employee requests that a check be issued and mailed for their final wages, the payment will be considered to have been made on the date the mailed payment is postmarked.

Next Steps:

As of June 9, 2022, employers in West Virginia may pay employees at the employer’s  choosing via the methods noted above. In cases where the employer pays its employees via payroll card, the employer must be offered the option of being paid by electronic transfer (e.g.; direct deposit) instead.  Where the necessary information for direct deposit is not provided by the employee, the employer may without employee agreement, pay the employee’s wages via payroll card. 

Have Questions?

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