NY’s Labor Law Policies

There are currently no laws/regulations in New York that deal with payroll debit cards and how to use them.  According to the NYDOL (New York Department of Labor), when used voluntarily, payroll debit cards are allowed. Last year a rule was established by the NYDOL for supplementary requirements to use direct deposit consent forms as well as payment by payroll debit card – a rule that was meant to become effective last month.

As such, for those employers paying their employees with payroll debit cards, they would not be able to use this for paying salaries without the employee being able to use at least one ATM offering withdrawal with no fees as well as a way of withdrawing the entire salary for each pay period or the remaining balance (without having to pay a fee).

However, a month before it was to become law, it was invalidated and revoked by the New York State Industrial Board of Appeal, reasoning that the NYDOL did not have the authority to take on the rule due to prohibitions and restrictions outside the Labor Code. The rules, argued the Board “go beyond regulation of the employment relationship and into the area of banking law, which is outside respondent’s competence and expertise in the regulation of employment and occupational safety and health.”

Furthermore, employers are not allowed to prevent employees from asking about/discussing their wages with a colleague.  Employers are allowed to restrict employees who have access to salary data of other employees, according to New York Labor Law §194(4).

Contained in a fact sheet provided by the NYDOL, on the matter of regulated speech between employees, it was written that: “[s]uch restrictions may not specifically reference the inquiry, discussion, and disclosure of wages.” Thus employers would be allowed to tell staff members to discuss matters directly related to their job duties during designated work periods, but this cannot be extended to salary discussions.