09.08.15 |
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Payroll Card Programs Receive the Green Light in Rhode Island

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In the State of Rhode Island, payroll cards are now considered a permissible means of wage payment. The new law, which was passed on July 15, 2015, establishes a range of protective measures to safeguard employees who use this method of wage payment.

With this new law, employers have more clarity on what’s required from their payroll card program as it relates to:

  • Withdrawals – Employees are allowed to make at least one withdrawal each pay period for any amount up to and including full net wages for that pay period without cost.
  • Frequency of Withdrawals – If the employee is paid more frequently than weekly, the employee is allowed to make at least one withdrawal each week for any amount up to and including full net wages for that week without cost.
  • Account Balance – Employees must be able to check their payroll card account balance, either through an automated telephone system or online, without cost, despite the number of inquiries an employee makes.1

In addition to what’s outlined above, payroll card programs in Rhode Island must comply with Federal Regulation E, which protects employees by providing them with fee information via periodic statements so they can monitor their account and protection against fraudulent transactions. Regulation E also stipulates that the employer must have a process for resolving account errors, must notify an employee in advance to a change in terms and receive the employee’s authorization before transferring wages to a payroll card.2

As the wage payments space continues to evolve, this type of legislation is helpful in providing clear instructions so employers and employees alike have a convenient and easy method for transferring wages and accessing money. Watch for a four-part series on the state of paycards coming up on ADP Compliance Insights.

Learn More About ADP SmartCompliance® Wage Payments

1An Act Relating to Labor and Labor Relations – Payment of Wages – http://webserver.rilin.state.ri.us/PublicLaws/law15/law15267.htm

2Regulation E – § 1005.18(c)(1) – http://www.consumerfinance.gov/eregulations/1005-18/2014-20681#1005-18-c-1




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