New York A.G. Backs Payroll Card Bill

New York Attorney General Eric Schneiderman on Friday announced his support for a proposal in the state legislature to regulate prepaid debit cards used by employers to pay wages.

"Workers should not have to pay in order to get their pay," he said in a press release. "While payroll cards can be helpful for employees without bank accounts, programs often impose fees that chip away at people's hard-earned wages."

Payroll cards are used by employers as an alternative to sending a paper check or making a direct deposit. They allow workers, who often don't have bank accounts, to access their pay by withdrawing cash at an automated teller machine or making point-of-sale purchases.

The legislation, which was introduced in the state assembly by Majority Leader Joseph D. Morelle, would impose new disclosure requirements for payroll cards and restrict certain types of fees.

The measure is based on a set of policy recommendations from a report released Friday by Schneiderman's office. The attorney general's labor bureau concluded that payroll card users lack sufficient information on how to avoid fees. It also found that many employers encourage low-wage workers to participate in payroll programs, without providing alternative options.