Regulatory Update- Rhode Island: Paycard Legislation Enacted

Rhode Island Enacts Paycard Legislation

For small business not aware of Paycards, these cards provide an alternative way to pay employees electronically.  Primarily used by the “unbanked”.

Unbanked employees simply don’t have a bank account. Most states allow electronic payments to employees via direct deposit, but many people still don’t have bank accounts. For companies wishing to “go green” and cut their costs on payroll by eliminating courier delivery of live checks, paystubs and reports, the paycard is an excellent option.

However, rules apply when utilizing paycards. ConnectPay works closely with paycard vendors to help our clients pay employees without bank accounts and remain compliant in the states they do business in.

The 3 keyrequirements in Rhode Island’s new legislation include:

  1. The employee must be able to make at least one withdrawal from the payroll card account in each pay period without charge for any amount up to and including the full amount of the employee’s net wages for the pay period.
  2. If the employee’s wages are paid more frequently than weekly, the employee must be able to make at least one withdrawal from the payroll card account each week without charge for any amount up to and including the full amount of the employee’s net wages for that week.
  3. Employees who receive wages by credit to a payroll card account must be provided with a means of checking their payroll card account balances through an automated telephone system and one additional electronic means, without cost, irrespective of the number of inquiries made.

For more information, connect with us.

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