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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20 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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30 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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30 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) of the act are amended and
the section is amended by adding a paragraph to read:
Section 2.1. Payroll card accounts.
In addition to any other requirements under this act, all of
the following provisions apply when payment of wages, salaries,
commissions or other compensation is made through transfers to a
payroll card account:
* * *
(4) Prior to [obtaining an employee's authorization,
the] enrolling an employee in a payroll card account, the
employer shall provide the employee with clear and
conspicuous notice relating to payroll cards issued under
paragraph (1), in writing or electronically, of all of the
following:
(i) All of the employee's wage payment options. The
disclosure under this subparagraph shall include a
statement substantially similar to any of the following:
(A) "You do not have to accept this payroll
card. Ask your employer about other ways to receive
your wages."
(B) "You have several options to receive your
wages: (list of options available to the employee,
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30 including direct deposit into a checking account of
the employee's choosing) or this payroll card. Tell
your employer which option you choose."
(ii) The terms and conditions of the payroll card
account option, including the fees that may be deducted
from the employee's payroll card account by the card
issuer.
(iii) A notice that third parties may assess fees in
addition to the fees assessed by the card issuer.
(iv) The methods available to the employee for
accessing wages without fees.
* * *
(9) The employer shall honor an employee's written or
electronic request to change the employee's method of
receiving wages from a payroll card account to direct deposit
[or negotiable check]. The change shall take effect as soon
as practicable, but no later than the first payday after 14
days from receipt by the employer of the employee's request
and any information necessary to implement the change.
* * *
(11) In addition to the restrictions on payroll card
accounts specified under this section, if an employer removes
the option for an employee to receive payment by both lawful
money and check and makes payment to employees by a payroll
card account established at a financial institution
designated by the employer in accordance with section 1.1(b)
and (c):
(i) the employer may not use a payroll card account
that charges a fee for the overdraft of the payroll card
account; and
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30 (ii) in lieu of the limits on fees specified under
paragraph (5)(ii), the payroll card account shall provide
the employee with the ability, without charge by the card
issuer, to make two in-network ATM withdrawals each pay
period, or if the employee is paid more frequently than
weekly, one in-network ATM withdrawal weekly.
Section 3. The addition of section 2.1(11) of the act shall
not apply to payroll card accounts provided to employees before
the effective date of this section.
Section 4. Nothing in this act shall affect, modify or amend
a collective bargaining agreement in effect on the effective
date of this section.
Section 5. This act shall take effect in 60 days.
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