August 26, 2019
Texas law allows employers to pay wages with payroll debit card without employee's initial consent
Effective September 1, 2019, recently enacted Texas HB 2240 allows employers, under certain circumstances, to mandate payment of wages by payroll debit card. Prior to this change in law, employers were required to obtain the employee's permission before paying wages by this method (though able to mandate payment of wages by electronic funds transfer).
Employers choosing to establish a plan to pay employees by payroll debit card must provide to employees at least 60 days prior to the first payment of wages by this method: (1) a written notice of the intent to pay by this method, (2) a document that lists all the fees associated with the employees' payroll debit card usage, and (3) a form that would allow an employee to opt out of the payment of wages by payroll debit card. For an employee hired after the date the employer adopts a payroll debit card program, the notice and documents must be provided no later than the employee's first day of work.
An employer that receives an opt-out form from an employee must change the method of payment as soon as possible, but not later than the first payday occurring after the 30th day after the receipt of the employee's request.
For more information on the electronic payment of wages, see the Texas Workforce Commission website.
For more information on direct deposit and pay cards, see our special report.
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