September 15, 2016

Governor Cuomo Enacts Country's Most Comprehensive Worker Protections Against Hidden Payroll Card Fees

New Payroll Card Regulations Issued By State Department of Labor Will Eliminate Costly Hidden Fees, Prohibit Employers from Receiving Kickbacks, Mandate Local Access to Fee-Less ATMs



Governor Andrew M. Cuomo today enacted the country’s most comprehensive payroll card protections for low-wage workers, preventing thousands of workers statewide from losing hundreds of dollars a year accessing their hard-earned wages. The new regulations will require payroll card companies to provide access to at least one fee-less ATM near where employees live or work, prevent card issuers from receiving kickbacks or financial remuneration for delivering wages via payroll card, and eliminate a host of fees, including those for account maintenance, overdraft and inactivity.

"These tough new standards protect some of our most vulnerable New Yorkers from predatory practices that seek to deny them a fair day's pay for a fair day's work,” Governor Cuomo said. “By eliminating costly hidden fees and removing barriers to accessing money workers have rightly earned, these nation-leading regulations build upon this administration’s efforts to prevent worker exploitation and help ensure all employees are treated with fairness, decency and respect.”

“One of the top priorities of the administration is protecting workers from abuse and exploitation,” Department of Labor Commissioner Roberta Reardon said. “The regulations adopted today ensure a transparent process and protect workers from watching their hard-earned paychecks whittled away by hidden fees.”

An estimated 13,000 businesses in New York State pay approximately 200,000 workers through debit cards that often feature hidden fees for accessing cash or checking balances. Many of the workers paid with these cards do not have a bank account, forcing them to use ATMs that require additional fees on top of those already imposed by the card issuer. 

Last May, Governor Cuomo announced that the state Department of Labor had published draft regulations to combat these predatory practices and ensure workers in New York State have access to their wages in full. These regulations include the following measures and are being adopted today:

  • Require that employees have access to at least one fee-less ATM near where they live or work. Employers who use payroll cards that provide access to wages are responsible for guaranteeing access;
  • Mandate unlimited free withdrawals from a fee-less ATM;
  • Prevent employers from passing on costs associated with a payroll debit card account to an employee and prohibit employers from receiving a kickback or other financial remuneration from the issuer, card sponsor, or any third party for delivering wages by payroll card; and
  • Go further than any other state in the nation by eliminating fees, including those for customer service, startup or maintenance, overdraft, inactivity, balance inquiries and account closing, among others.

Businesses using payroll cards will continue to be able to save on the costs of printing and distributing paychecks and replacing lost or stolen checks under the regulations.

The new regulations govern all methods of wage payment: cash, paycheck, direct deposit or pay card.


All employers in New York State are required to give employees a wage statement or pay stub each payday. They are also required to maintain records of how long each employee works, the rate or rates of pay, how each employee is paid, itemized deductions, and credits claimed by the employer (i.e., tip, meal and lodging allowances).

For questions about wages or other labor standards issues, or to file a complaint, visit: https://labor.ny.gov/workerprotection/laborstandards/ls_ContactUs.shtm. 

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