Effective March 24, 2010, employers in Utah are now permitted to use pay cards to compensate their employees for their wages or salary. The new regulation (Utah Admin. Rule R610-3-22) defines a pay card as a “stored value card that can be used at an ATM-type machine to access wages that are credited to the card.” If an employer in Utah intends to pay employees with a pay card, it must ensure that this new practice meets the following conditions:

1. With one use, or a single transaction, the employee must be able to withdraw the full amount of earned wages without incurring a fee.
2. The full amount of wages for a pay period shall be available for the employee via the pay card on the applicable payday.
3. On each payday, the employer must provide the employee with a written or electronic statement of deductions from the employee’s gross wages for the pay period at issue.
    

Utah is not the only state to permit employers to utilize pay cards for the payment of wages. At this time, many states allow this practice, including: Alaska, Arizona, California, Colorado, Delaware, District of Columbia, Florida, Hawaii, Idaho, Illinois, Indiana, Iowa, Kansas, Kentucky, Maine, Maryland, Michigan, Minnesota, Missouri, Montana, Nebraska, Nevada, New Hampshire, New Jersey, New York, North Carolina, North Dakota, Oklahoma, Oregon, Pennsylvania, South Carolina, South Dakota, Tennessee, Texas, Virginia, Washington, West Virginia, Wisconsin, and Wyoming. Many of these states, however, have different requirements governing the use of pay cards. Moreover, in a number of these states, it may be unlawful to require employees to accept payment via pay card. As a result, before implementing a pay card system, employers should check the laws in states in which they operate to ensure that any change to existing pay practices complies with state law.

This entry was written by Jennifer L. Mora.

Image credit: Channel R