Pennsylvania SB 581: An Act amending the act of December 19, 1975 (P.L.604, No.173), entitled "An act to facilitate the use of electronic funds transfer systems by providing that credits to accounts in financial institutions designated by recipients shall satisfy legal requirements for payments by cash or checks," further providing for electronic funds transfers, for consumer protections and for payroll card accounts.

Bill Text

PRINTER'S NO. 588
THE GENERAL ASSEMBLY OF PENNSYLVANIA
SENATE BILL
No. 581
Session of
2025
INTRODUCED BY MILLER, BAKER, GEBHARD, FONTANA, STREET AND
TARTAGLIONE, APRIL 9, 2025
REFERRED TO LABOR AND INDUSTRY, APRIL 9, 2025
AN ACT
Amending the act of December 19, 1975 (P.L.604, No.173),
entitled "An act to facilitate the use of electronic funds
transfer systems by providing that credits to accounts in
financial institutions designated by recipients shall satisfy
legal requirements for payments by cash or checks," further
providing for electronic funds transfers, for consumer
protections and for payroll card accounts.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. Sections 1.1 and 2 of the act of December 19,
1975 (P.L.604, No.173), entitled "An act to facilitate the use
of electronic funds transfer systems by providing that credits
to accounts in financial institutions designated by recipients
shall satisfy legal requirements for payments by cash or
checks," are amended to read:
Section 1.1. Electronic funds transfers.
(a) Authorization.--For the purposes of any statute, rule or
regulation requiring any payment to be made in lawful money or
by check, whether for wages, salaries, commissions or other
claims of any kind, the payment may be made by credit to an
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account in a financial institution, including a payroll card
account, authorized to accept deposits or payments if the
recipient has authorized the method of payment in writing or
electronically.
(b) Duties of employers.--
(1) An employer may pay wages, salaries or commissions
due to an employee by credit to an account in a financial
institution, including a payroll card account, in accordance
with this subsection.
(2) If the employer elects to eliminate both options for
an employee to receive payment in lawful money or by check
and offers payment only by credit to an account in a
financial institution, t he employer shall notify the employee
in clear and conspicuous language that the employee will no
longer have the option to receive payment in lawful money or
by check.
(3) The employee shall receive the notice at least 45
days prior to the date of the payday that the employee will
no longer have the option to receive payment in lawful money
or by check. The notice shall:
(i) clearly state that it is the employee's right to
designate the account in a financial institution to
receive payment;
(ii) explain the employee's options, including
direct deposit and a payroll card account;
(iii) include the date of the payday that the
employee will no longer have the option to receive
payment in lawful money or by check;
(iv) clearly state that, if the employee does not
designate a financial institution at least seven days
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prior to the payday specified under subparagraph (iii),
the employer may make payment to the employee to a
payroll card account established at a financial
institution designated by the employer; and
(v) include any form and instructions necessary for
the employee to designate the account in a financial
institution of the employee's choosing to receive
payment.
(c) Failure to designate financial institution.--
(1) If an employee does not designate a financial
institution at least seven days prior to the payday specified
under subsection (b)(3)(iv), the employer may pay wages,
salaries or commissions due to the employee to a payroll card
account established at a financial institution designated by
the employer that complies with the requirements of section
2.1 or temporarily by negotiable check, in the discretion of
the employer.
(2) Before initially enrolling an employee in a payroll
card account in accordance with section 2.1(1), the employer
shall offer the employee the opportunity to designate the
account in a financial institution to receive payment in
accordance with subsection (b).
Section 2. Consumer protections.
When wages, salaries, commissions or other payments are
transferred to an account at a financial institution as
described in section 1.1:
(1) the financial institution holding the account to
which transfers are made shall provide the employee or other
payee with the disclosures, notices of transfer, change in
term notices, access to account information and other
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consumer protections to the extent required by 12 CFR [Part]
Pt. 1005 (relating to electronic fund transfers (Regulation
E)) and 83 Fed. Reg. 30, 6364 (February 13, 2018) (relating
to rules concerning prepaid accounts under the Electronic
Fund Transfer Act (Regulation E)); and
(2) an employer shall provide an employee with a written
or electronic statement of earnings and deductions each pay
period in accordance with applicable law.
Section 2. Section 2.1(4) and (9) o