HB-5821, As Passed House, July 1, 2010

SUBSTITUTE FOR

HOUSE BILL NO. 5821

     A bill to amend 1978 PA 390, entitled

"An act to regulate the time and manner of payment of wages and

fringe benefits to employees; to prescribe rights and

responsibilities of employers and employees, and the powers and

duties of the department of labor; to require keeping of records;

to provide for settlement of disputes regarding wages and fringe

benefits; to prohibit certain practices by employers; to prescribe

penalties and remedies; and to repeal certain acts and parts of

acts,"

by amending section 6 (MCL 408.476), as amended by 2004 PA 534.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

     Sec. 6. (1) An employer or agent of an employer may pay wages

to an employee by any of the following methods:

     (a) Payment in United States currency.

     (b) Payment by a negotiable check or draft payable on

presentation at a financial institution or other established place

of business without discount in United States currency.

     (c) Direct deposit or electronic transfer to the employee's

account at a financial institution.

     (d) Issuance of Issuing a payroll debit card to the employee

that complies with subsection (6). As used in this section,

"payroll debit card" means a stored-value debit card that provides

an employee access to his or her wages, for withdrawal or transfer

by the employee, through a network of automatic teller machines.

The term includes cards commonly known as payroll debit cards,

payroll cards, and paycards.

     (2) Except as provided in section 283a of the management and

budget act, 1984 PA 431, MCL 18.1283a, or in subsection (4), an

employer or agent of an employer shall not deposit an employee's

wages in a bank, credit union, or savings and loan association

without the full, free, and written consent of the employee,

obtained without intimidation, coercion, or fear of discharge or

reprisal for refusal to permit the deposit.

     (3) An Except as provided in subsection (4), an employer or

agent of an employer shall not issue a payroll debit card to an

employee under subsection (1)(d) without the full, free, and

written consent of the employee, obtained without intimidation,

coercion, or fear of discharge or reprisal for refusal to accept

the payroll debit card. However, an employer paying wages by

payroll debit card to 1 or more of its employees as of January 1,

2005 may pay wages to any of its employees by payroll debit card

without obtaining the consent described in this subsection act.

     (4) An employer or agent of an employer may require employees

to receive wages only through direct deposit or a payroll debit

card that complies with subsection (6) if the employer has provided

the employee with all of the following:

     (a) A written form that allows the employee the option to

receive wages either by direct deposit to the employee's account at

a financial institution or through a payroll debit card.

     (b) A statement indicating that, except for an employee

currently paid by direct deposit, failure to return the form within

30 days with the account information necessary to implement direct

deposit will be presumed to indicate consent to receiving wages

through a payroll debit card. If an employee is currently paid by

direct deposit, the method of payment shall not be changed to

payroll debit card without written consent of the employee.

     (c) Written disclosure of all of the following concerning the

payroll debit card:

     (i) The terms and conditions for use, including an itemized

list of any and all fees.

     (ii) The methods for accessing wages without charge.

     (iii) A statement that, if the payroll debit card is used

outside of the specified network of automatic teller machines, both

the payroll card issuer and the operator of the automatic teller

machine may impose charges.

     (iv) The methods to obtain free balance inquiries.

     (v) The employee's right to elect to change the method of

receiving wages at any time, as provided in subsection (5).

     (vi) That the payroll debit card does not provide access to a

savings or checking account.

     (5) An employee may request a change in the method of

receiving wages established under subsection (4) at any time. The

House Bill No. 5821 (H-3) as amended July 1, 2010

employer shall take no longer than 1 pay period to implement the

change after the employer receives the request and any information

necessary to implement the request. An employer shall allow an

employee to select payment by direct deposit or electronic transfer

under subsection (4) freely, without intimidation, coercion, or

fear of discharge or reprisal for the choice.

     (6) An employer shall not pay wages by issuing a payroll debit

card unless the payroll debit card has all of the following

characteristics:

     (a) Allows the employee to make at least 1 withdrawal or

transfer [each week] without charge for any amount the employee

elects up to the balance accessible through the card at a teller

window of any financial institution participating in the payment

network identified on the card or automatic teller machine within

the specified financial institution's network of automatic teller

machines.

     (b) Allows no changes in fees or terms of service unless the

employee has received a written notice at least 21 days in advance

of the date that the changes take effect identifying the changes.

     (c) Provides a method for the employee to make an unlimited

number of balance inquiries without charge, either electronically

or by telephone.

     (d) Is not linked to any form of credit, including a loan

against future pay or a cash advance on future pay.

(7) (4) An employer shall not require an employee to pay any

fees or costs incurred by the employer in connection with paying

wages or establishing a process for paying wages under by a method

described in subsection (1)(c) or (d).

     (8) As used in this section:

     (a) "Federally insured financial institution" means a state or

nationally chartered bank or a state or federally chartered savings

and loan association, savings bank, or credit union whose deposits

are insured by an agency of the United States government and which

maintains a principal office or branch office located in this state

under the laws of this state or the United States.

     (b) "Payroll debit card" means a stored-value card issued by a

federally insured financial institution that provides an employee

with immediate access for withdrawal or transfer of his or her

wages through a network of automatic teller machines. The term

includes a card commonly known as a payroll debit card, payroll

card, and paycard.