On May 5, 2015, Governor Nathan Deal of Georgia signed a law amending O.C.G.A. § 34-7-2 and allowing Georgia employers to pay their employees through credit to a payroll card account. The law defines a “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, whether the account is operated or managed by such person, firm, or corporation or a third-party payroll processor, a depository institution, or any other person.
O.C.G.A. § 34-7-2 previously allowed employers to compensate their employees by cash, check, or direct deposit (with the employee’s consent) only. The amended law now explicitly lists four payment options for employers: (1) cash, (2) check, (3) direct deposit with the employee’s consent, or (4) credit to a payroll card account. The use of payroll cards has become an increasingly popular option for employers who want to reduce the costs of administering payroll and reduce paper transactions.
Pursuant to the new law, Georgia employers may use payroll card accounts to compensate their employees so long as they meet the law’s requirements governing the use of such cards. Specifically, employers making wage and salary payments via payroll card accounts must provide employees with:
° A written explanation of any fees associated with the payroll card account, provided simultaneously with a form allowing employees to opt out of receiving wage payments through a credit to a payroll card account;
– For all employees who are employed as of the date the employer chooses to begin making wage payments through payroll card accounts, the written explanation and opt-out form must be provided at least 30 days before the payroll card account will become available.
– For employees hired after the date that the employer elects to make wage payments through payroll card accounts, the written explanation and opt-out form must be provided at the time of hiring.
– The opt-out form must be made generally available to employees.
° The ability to opt out of receiving wage payments as a credit to a payroll card account by submitting a written request for payment by check; and,
° The ability to opt out of receiving wage payments as a credit to a payroll card account by properly designating and authorizing direct deposit payment.
This amendment to O.C.G.A. § 34-7-2 is effective immediately.
This client alert is intended to inform clients and other interested parties about legal matters of current interest and is not intended as legal advice.