Payroll Card Accounts – They're New in Georgia

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On May 5, 2015, SB 88 was signed into law by Governor Nathan Deal. This law amends O.C.G.A. § 34-7-2 to permit Georgia employers to pay employees through payroll card accounts. The new law went into effect immediately.

Under the old version of O.C.G.A. § 34-7-2, Georgia employers were required to pay wages with cash, check or (with the employee's consent) direct deposit. The amended version of the statute adds payment "by credit to a payroll card account" as a viable option for compensating employees.

The statute defines "payroll card account" as "an account that is directly or indirectly established through a person, firm, or corporation employing wageworkers or other employees and to which electronic fund transfers of the wages or salary of such employees are made on a recurring basis." The definition includes accounts managed directly by the person, firm or corporation, as well as accounts managed by a third-party payroll processor, bank or other person.

If an employer elects to pay its employees through a payroll card account, the employer must give its employees the ability to opt out by (1) submitting in writing a request for a check, or (2) providing the proper designation and authorization to receive payment via direct deposit.

In addition, the employer must provide any employee compensated through a payroll card account with (1) a written explanation of any fees associated with the payroll card account, and (2) a form allowing the employee to opt out of receiving payments by a payroll card account. These documents must be provided simultaneously. They also must be given to current employees at least 30 days prior to the date the payroll card account is made available and provided to new employees at the time of hire. In addition, the opt-out form must be made generally available to employees at all times.

 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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