Bill Text: CA AB51 | 2011-2012 | Regular Session | Amended
Bill Title: Payroll cards.
Spectrum: Partisan Bill (Democrat 2-0)
Status: (Engrossed - Dead) 2011-07-06 - In committee: Set, first hearing. Hearing canceled at the request of author. [AB51 Detail]
Download: California-2011-AB51-Amended.html
BILL NUMBER: AB 51 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY MAY 31, 2011
AMENDED IN ASSEMBLY MAY 9, 2011
AMENDED IN ASSEMBLY MARCH 31, 2011
INTRODUCED BY Assembly Members Yamada and Carter
DECEMBER 6, 2010
An act to amend Sections 215, 225.5, and 226 of, and to add
Section 213.5 to, the Labor Code, relating to payroll cards.
LEGISLATIVE COUNSEL'S DIGEST
AB 51, as amended, Yamada. Payroll cards.
(1) Existing law prohibits an employer from issuing in payment of
wages due certain instruments, including an order, check, draft,
note, memorandum, scrip, coupon, card, or other acknowledgment of
indebtedness or redeemable instrument, unless specified requirements
are satisfied.
This bill would provide that this proscription does not
prohibit an employer from paying authorize an employer
to pay an employee's wages by means of a payroll card, as
defined, provided that specified requirements are satisfied. In
addition, the bill would make a violation of its provisions a
misdemeanor and would subject a violator to specified civil
penalties. By creating new crimes, this bill would impose a
state-mandated local program.
(2) Existing law requires an employer to provide employees, at the
time wages are paid, with an itemized statement containing specified
items regarding the wages earned. This bill would extend the
requirement for an itemized statement of wages to an employer who
pays his or her employees via payroll cards.
The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
This bill would provide that no reimbursement is required by this
act for a specified reason.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 213.5 is added to the Labor Code, to read:
213.5. (a) For purposes of this section, the following
definitions apply:
(1) "Employer" means a person, partnership firm, corporation,
limited liability company, association, or other entity that employs
a person or persons to perform services for a wage or salary, and
includes a person, partnership firm, corporation, limited liability
company, association, or other entity acting as an agent of an
employer, directly or indirectly.
(2) "Issuer" means the payroll card issuer, and includes a person
acting as an agent of an issuer, directly or indirectly.
(3) "Payroll card" means an access mechanism, including a prepaid
card, code, or other device, issued to an employee by an employer, or
by another entity by arrangement with the employer, through which
the employer provides the employee access to his or her wages.
(4) "Payroll card account" means an account that holds funds drawn
upon by a payroll card.
(5) "Payroll card contract" means a contract entered into by an
employer with an issuer to provide employees with payroll cards as a
means to pay wages.
(b) Nothing in Section 212 prohibits an employer from
paying Notwithstanding Section 212, an employer may
pay an employee's wages through a payroll card program
, provided that if all of the following
requirements are satisfied:
(1) The employer has obtained the employee's voluntary
written consent to receive wages by payroll card. That
consent must be voluntary and not given as a result of intimidation,
coercion, or fear of discharge or reprisal for refusal to participate
in the payroll card program. Prior to obtaining the
employee's consent, the employer shall provide the employee, in the
language the employer normally uses to communicate employment-related
information to the employee, all of the following information:
(A) A description, stated in plain language, of the employee's
options for receiving wages.
(B) The terms and conditions of the payroll card account,
including a clear, conspicuous, and complete itemized list, in a form
the employee may retain for his or her records, of any fees that may
be deducted from the employee's payroll card account by the issuer.
The list shall state the dollar amount of each fee.
(C) A list of the services available to the employee pursuant to
paragraph (4).
(2) The employer has not made participation in the payroll card
program a condition of hire or continued employment.
(3) The employer has offered the employee, and the employee has
declined, both the option of receiving his or her wages by direct
deposit to a depository account of the employee's choosing and the
option of receiving payment by paper check.
(4) The payroll card contract the employer has entered into with
the issuer requires that the issuer provide the employee, at no cost
to the employee, all of the following:
(A) The right to make at least two withdrawals per pay period from
an automated teller machine (ATM) on the day of and after
each deposit of wages .
(B) At least one method to withdraw the entire amount of wages for
each pay period.
(C) A periodic statement at least once each month, or at least
once every three months if there is a balance on the payroll card but
no activity on the payroll card account. The employee may choose to
receive electronic or paper statements. Each statement shall include
all transactions during the statement period, including deposits,
withdrawals, fees charged, and other transactions affecting the
payroll card account. The employee may choose to decline to receive
statements.
(D) A transaction history for the 12-month period preceding the
request, at the request of the employee.
(E) Electronic balance notifications for each day or after each
transaction, at the request of the employee.
(F) An annual notice by postal mail informing the employee of his
or her right to request periodic statements, 12-month transaction
histories, and electronic balance notifications.
(5) The payroll card contract does not provide for an employee to
be charged the following fees:
(A) An application, initiation, loading, participation, or other
fee to receive wages or to obtain the payroll card.
(B) A fee for a point-of-sale transaction, unless the fee is
charged by a person that accepts credit or debit cards for the
transaction and the employee initiated the transaction.
(C) A fee to withdraw funds from a teller or ATM within the
network of the financial institution providing the payroll card
account.
(D) An overdraft, shortage, or low-balance fee.
(E) A fee for a declined transaction.
(F) A fee for account inactivity.
(G) A fee for the first three telephone calls to a live customer
service representative per pay period.
(H) A fee to access balance or other account information online,
by an interactive voice response system, or by any other automated
system offered in conjunction with the payroll card, or at an ATM in
the network of the issuer.
(I) A fee for a written statement or a transaction history.
(J) A fee to close the payroll card account or issue payment of
the remaining balance by check or other means.
(K) A fee to provide at least one replacement card each year.
(L) A fee not expressly identified by type and amount in the
contract between the employer and the issuer.
(M) A fee for using a method, offered by the employer, to withdraw
the entire amount of wages for each pay period.
(6) The funds in the payroll card account do not expire. The
payroll card account may be closed for inactivity, with reasonable
notice to the employee, provided that the remaining funds in the
payroll card account are refunded to the employee at no cost to the
employee. If the payroll card has an expiration date, the issuer
shall provide a new replacement card to the employee at least 15 days
before the expiration date at no charge to the employee.
(7) The payroll card account is not linked to any form of credit,
including a loan against future wages or a cash advance on future
wages. This paragraph does not prohibit an issuer from honoring an
inadvertent overdraft transaction at no additional charge to the
employee.
(8) The employer honors a request by the employee to change the
method of receiving wages from the payroll card account to another
method that is allowed by law, within two pay periods from the time
of the request.
(9) The payroll card account is insured by the Federal Deposit
Insurance Corporation or the National Credit Union Administration on
a passthrough basis to the employee.
(6) The payroll card account complies with all federal law
applicable to direct deposit, including Section 205 and following of
Title 12 of the Code of Federal Regulations, promulgated by the
Federal Reserve.
(c) Any wages paid using a payroll card program that does not meet
the requirements of this section are considered unpaid wages for
purposes of Section 225.5.
(d)
(c) Nothing in this section shall relieve the employer
of his or her obligations under subdivision (a) of Section 226.
(d) The division is authorized to create and enforce further
regulations regarding payroll card wage payments that are consistent
with this section.
SEC. 2. Section 215 of the Labor Code is amended to read:
215. A person, or the agent, manager, superintendent, or officer
thereof, who violates any provision of Section 201.3, 204, 204b, 205,
207, 208, 209, 212, or 213.5 is guilty of a misdemeanor. A failure
to keep posted any notice required by Section 207 is prima facie
evidence of a violation of these sections.
SEC. 3. Section 225.5 of the Labor Code is amended to read:
225.5. In addition to, and entirely independent and apart from,
any other penalty provided in this article, a person who unlawfully
withholds wages due an employee in violation of Section 212, 213.5,
216, 221, 222, or 223 shall be subject to a civil penalty as follows:
(a) For an initial violation, one hundred dollars ($100) for each
failure to pay each employee.
(b) For each subsequent violation, or any willful or intentional
violation, two hundred dollars ($200) for each failure to pay each
employee, plus 25 percent of the amount unlawfully withheld.
The penalty shall be recovered by the Labor Commissioner as part
of a hearing held to recover unpaid wages and penalties or in an
independent civil action. The action shall be brought in the name of
the people of the State of California and the Labor Commissioner and
attorneys thereof may proceed and act for and on behalf of the people
in bringing the action. Twelve and one-half percent of the penalty
recovered shall be paid into a fund within the Labor and Workforce
Development Agency dedicated to educating employers about state labor
laws, and the remainder shall be paid into the State Treasury to the
credit of the General Fund.
SEC. 4. Section 226 of the Labor Code is amended to read:
226. (a) Every employer shall, semimonthly or at the time of each
payment of wages, furnish each of his or her employees, either as a
detachable part of the check, draft, or voucher paying the employee's
wages, or separately when wages are paid by personal check, cash, or
payroll card, an accurate itemized statement in writing showing (1)
gross wages earned, (2) total hours worked by the employee, except
for any employee whose compensation is solely based on a salary and
who is exempt from payment of overtime under subdivision (a) of
Section 515 or any applicable order of the Industrial Welfare
Commission, (3) the number of piece-rate units earned and any
applicable piece rate if the employee is paid on a piece-rate basis,
(4) all deductions, provided that all deductions made on written
orders of the employee may be aggregated and shown as one item, (5)
net wages earned, (6) the inclusive dates of the period for which the
employee is paid, (7) the name of the employee and his or her social
security number, except that by January 1, 2008, only the last four
digits of his or her social security number or an employee
identification number other than a social security number may be
shown on the itemized statement, (8) the name and address of the
legal entity that is the employer, and (9) all applicable hourly
rates in effect during the pay period and the corresponding number of
hours worked at each hourly rate by the employee. The deductions
made from payments of wages shall be recorded in ink or other
indelible form, properly dated, showing the month, day, and year, and
a copy of the statement or a record of the deductions shall be kept
on file by the employer for at least three years at the place of
employment or at a central location within the State of California.
(b) An employer that is required by this code or any regulation
adopted pursuant to this code to keep the information required by
subdivision (a) shall afford current and former employees the right
to inspect or copy the records pertaining to that current or former
employee, upon reasonable request to the employer. The employer may
take reasonable steps to assure the identity of a current or former
employee. If the employer provides copies of the records, the actual
cost of reproduction may be charged to the current or former
employee.
(c) An employer who receives a written or oral request to inspect
or copy records pursuant to subdivision (b) pertaining to a current
or former employee shall comply with the request as soon as
practicable, but no later than 21 calendar days from the date of the
request. A violation of this subdivision is an infraction.
Impossibility of performance, not caused by or a result of a
violation of law, shall be an affirmative defense for an employer in
any action alleging a violation of this subdivision. An employer may
designate the person to whom a request under this subdivision will be
made.
(d) This section does not apply to any employer of any person
employed by the owner or occupant of a residential dwelling whose
duties are incidental to the ownership, maintenance, or use of the
dwelling, including the care and supervision of children, or whose
duties are personal and not in the course of the trade, business,
profession, or occupation of the owner or occupant.
(e) An employee suffering injury as a result of a knowing and
intentional failure by an employer to comply with subdivision (a) is
entitled to recover the greater of all actual damages or fifty
dollars ($50) for the initial pay period in which a violation occurs
and one hundred dollars ($100) per employee for each violation in a
subsequent pay period, not exceeding an aggregate penalty of four
thousand dollars ($4,000), and is entitled to an award of costs and
reasonable attorney's fees.
(f) A failure by an employer to permit a current or former
employee to inspect or copy records within the time set forth in
subdivision (c) entitles the current or former employee or the Labor
Commissioner to recover a seven-hundred-fifty-dollar ($750) penalty
from the employer.
(g) An employee may also bring an action for injunctive relief to
ensure compliance with this section, and is entitled to an award of
costs and reasonable attorney's fees.
(h) This section does not apply to the state, to any city, county,
city and county, district, or to any other governmental entity,
except that if the state or a city, county, city and county,
district, or other governmental entity furnishes its employees with a
check, draft, or voucher paying the employee's wages, the state or a
city, county, city and county, district, or other governmental
entity shall, by January 1, 2008, use no more than the last four
digits of the employee's social security number or shall use an
employee identification number other than the social security number
on the itemized statement provided with the check, draft, or voucher.
SEC. 5. No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of the
Government Code, or changes the definition of a crime within the
meaning of Section 6 of Article XIII B of the California
Constitution.
