NY Appellate Court Upholds Department Of Labor's Payroll Card Regulations

Author:Mr Stephen Middlebrook and Tom Kierner
Profession:Womble Bond Dickinson

Is this what closure feels like? A New York appellate court issued a ruling in the Global Cash Card ("GCC") case last week, potentially bringing to an end to the 3+ year saga surrounding the New York Department of Labor's ("NY DOL") regulations of payroll cards. The appellate court ruled in favor of the NY DOL and upheld the regulations. Unless GCC decides to appeal this to the state's highest court, this legal odyssey may finally be over.

In September, 2016, the NY DOL issued regulations regarding approved methods of wage payment, which included provisions regulating the use of payroll cards. Since then, Global Cash Card ("GCC")—a payroll card provider—and the NY DOL have been embroiled in litigation over the legality of the NY DOL regs. GCC prevailed before the Industrial Board of Appeals, but the NY DOL won at the trial court twice. The appellate court affirmed the trial court's order, holding that the NY DOL did not exceed the authority granted to it by the legislature.

For those readers who need a quick refresher, the NY DOL regulations place a number of unusual requirements on payroll card programs in the state:

Seven business day waiting period after employee consents to the card before they can be paid by the card Access one or more free ATMs located "within a reasonable travel distance to the employee's work location or home" Written notices and consent must be in English and the primary language of the employee (this requirement takes effect only after NY DOL issues templates in various languages, which it has not yet done) Prohibitions on linking the payroll card to any form of credit, including a loan against future pay or a cash advance on future pay 30 days' advance notice prior to any change...

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