Pennsylvania Regulations on Payroll Debit Cards and Direct Deposit

Effective May 5, 2017, Pennsylvania Governor Tom Wolf signed into law a bill that clarifies the Commonwealth’s law regarding payroll debit cards.  The new legislation amends Pennsylvania’s Banking Code, and makes explicit that the use of payroll debit cards is permissible under the law of Pennsylvania, provided the employer and the bank issuing the payroll debit card comply with certain requirements. The new guidance supersedes any previous legislation on the issue. Under the new law, the use of payroll debit cards is permitted if, among other things,

  • the employer does not mandate the use of payroll debit cards;
  • the employer complies with stringent notice requirements;
  • the employee is allowed one free withdrawal of all wages earned per pay period;
  • the employee is provided a free method of checking the balance on the card electronically or by telephone; and
  • there are no fees for using the payroll card.

It is important to note that this law is in line with Pennsylvania’s laws regarding direct deposit – specifically that it cannot be mandated by an employer. Employees must have the ability to opt out of direct deposit should they have the desire. Similar to other payroll processes, employees should individually provide written consent for direct deposit or payroll debit cards prior to implementation.*

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*This is not a substitute for legal advice and should not be used as such. Do not rely on the information on this website as an alternative to legal advice from your attorney or other professional legal services provider.