March 2, 2011 — The Electronic Payroll Coalition (EPC) today released “Joint Core Principles for Payroll Cards,” developed in collaboration with the Consumers Union and the National Consumer Law Center. These core principles are an important component in the fair and safe use of the payroll card as a convenient method for employees to receive wage payments.
Representing the Association for Financial Professionals (AFP); the American Payroll Association (APA); and NACHA — The Electronic Payments Association, the EPC promotes best practices and raises awareness of the benefits of electronic payroll, both Direct Deposit and payroll cards. Collaboration between the EPC and the Consumers Union and National Consumer Law Center resulted in many shared philosophies on the use of payroll cards. The Core Principles unveiled today represent organizational consensus with respect to recommendations for all those who are engaged in issuing, selecting, using, or regulating payroll cards. Each organization may issue supplemental principles.
“Payroll cards are an important payroll solution for both employers and employees,” said Dan Maddux, executive director, APA. “Working jointly with the Consumers Union and the National Consumer Law Center enabled the EPC to develop clear and practical principles for states and businesses to implement pay card programs that are fair for both employee and employer alike.”
“Businesses of all sizes are looking for ways to increase payroll efficiencies, safety, and security, while delivering a valuable employee benefit,” said David Bellinger, director, Payments, AFP. “Fully electronic payroll provides the solution to meet those goals, and the payroll card introduces a valuable tool to deliver these benefits to a larger audience.”
All five participating organizations defined the “Joint Core Principles for Payroll Cards” as follows:
- Employees must be able to access their full wages, at least once each pay period, without cost.
- Cardholder fees to open or close a payroll card account, and fees that inhibit an employee's ability to access full wages at least once each pay period without cost, must be prohibited. Cardholders should not be assessed a fee for a replacement card unless they have already received one free replacement card during the calendar year.
- The terms and conditions of the payroll card program, including all program fees that may be incurred by the employee, if any, must be provided to employees in a clear and conspicuous manner in paper or printable form before the employee is enrolled in a payroll card program.
- Terms and conditions and fee disclosures must be provided in the languages the employer normally uses to communicate employment-related policies to their employees.
- Employees should be provided an option to check account balances via an automated telephonic system and at least one additional electronic option. These should be offered without any cost to the employee.
- Payroll cards should not be linked to abusive forms of credit, credit practices and fee-based overdraft programs.
- Employers must select a program that maintains payroll funds in an FDIC- or NCUA-insured account on a pass-through basis to the individual cardholder.
- The funds in a payroll card account shall not expire. This principle does not override any effect of state escheat laws.
- If the payroll card has an expiration date, the employee must be provided with a free replacement card prior to the expiration date.
- Employers who offer payroll cards must also offer direct deposit to a checking or savings account established by the employee at a bank or credit union of the employee’s choosing. Direct deposit provides a safe, reliable and convenient method of wage payment for employees with bank accounts.
“Electronic payroll provides a simple, safe, smart, and green solution for all those involved in the payroll process,” said Jan Estep, president and CEO, NACHA. “The core principles revealed today clearly set the tone for future developments in electronic payments, and NACHA is pleased to be engaged in the dialogue.”
For more information on the Core Principles or developments with electronic payroll, contact the Electronic Payroll Coalition.
About the Electronic Payroll CoalitionNACHA — The Electronic Payments Association, the Association for Financial Professionals (AFP), and the American Payroll Association (APA) founded the Electronic Payroll Coalition to drive awareness of the benefits of electronic payroll, both Direct Deposit and payroll cards. Employers and employees in all work environments benefit from the time- and cost-savings, security, and reliability of electronic payroll. For more information on the Electronic Payroll Coalition, contact NACHA Government and Industry Outreach Managing Director Ian Macoy at firstname.lastname@example.org.
About the Association for Financial Professionals (AFP)The Association for Financial Professionals (AFP) is the daily resource for more than 16,000 members, providing news, economic research, certification programs, networking events, analytical tools, training, and public policy representation to legislators and regulators. AFP's global reach extends to over 150,000 treasury and financial professionals worldwide, including AFP of Canada; London-based gtnews, an on-line resource for the treasury and finance community; and bobsguide, a financial IT solutions network. For more information, visit www.afponline.org.
About the American Payroll Association (APA)Established in 1982, the American Payroll Association (APA) is the nation's leader in payroll education, publications, and training. The nonprofit association conducts more than 300 payroll training conferences and seminars across the country each year and publishes a complete library of resource texts and newsletters. Every year, nearly 20,000 professionals attend APA training sessions. Representing more than 22,000 members, APA is the industry's highly respected and collective voice in Washington, D.C. Visit APA online at www.americanpayroll.org.
About NACHA — The Electronic Payments AssociationNACHA manages the development, administration, and governance of the ACH Network, the backbone for the electronic movement of money and data. The ACH Network serves as a safe, secure, reliable network for direct consumer, business, and government payments, and annually facilitates billions of payments such as Direct Deposit and Direct Payment. Utilized by all types of financial institutions, the ACH Network is governed by the NACHA Operating Rules, a set of fair and equitable rules that guide risk management and create certainty for all participants. As a not-for-profit association, NACHA represents nearly 11,000 financial institutions via 17 regional payments associations and direct membership. Through its industry councils and forums, NACHA brings together payments system stakeholders to enable innovation that strengthens the industry with creative payment solutions. To learn more, visit www.nacha.org, www.electronicpayments.org, and www.payitgreen.org.