27Mar2007… 0809h

05/17/07 1556s

13Jun2007… 2230eba





AN ACT relative to payment of wages by automated pay card.

SPONSORS: Rep. Wheeler, Merr 6; Rep. Holden, Hills 7

COMMITTEE: Labor, Industrial and Rehabilitative Services


This bill permits an employer to use automated payroll cards provided the employee can withdraw his or her net pay from a bank or automated teller machine or other location convenient to the place of employment without any cost.

This bill is a request of the department of labor.

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Explanation: Matter added to current law appears in bold italics.

Matter removed from current law appears [in brackets and struckthrough.]

Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

27Mar2007… 0809h

05/17/07 1556s

13Jun2007… 2230eba




In the Year of Our Lord Two Thousand Seven

AN ACT relative to payment of wages by automated pay card.

Be it Enacted by the Senate and House of Representatives in General Court convened:

299:1 New Paragraphs; Definitions. Amend RSA 275:42 by inserting after paragraph VII the following new paragraphs:

VIII. “Payroll card” means an access device issued and accepted by a financial institution to access funds from the employee’s payroll card account.

IX. “Payroll card account” means an account directly or indirectly established by an employer on behalf of an employee to which electronic fund transfers of the employee’s wages, salary, or other employee compensation are made on a recurring basis. A payroll card account does not include a savings account or a demand deposit account at a financial institution and shall be subject to Regulation E, 12 C.F.R. part 205. Disclosures, periodic statements, or alternatives to periodic statements; notices; error resolution procedures; and limitations on liability, with respect to payroll cards, shall be in accordance with the federal Electronic Fund Transfer Act, 15 U.S.C. section 1693 et seq., and its implementing regulation, Regulation E, 12 C.F.R. part 205.

299:2 Weekly. Amend RSA 275:43 to read as follows:

275:43 Weekly.

I. Every employer shall pay all wages due to employees within 8 days including Sunday after expiration of the week in which the work is performed, except when permitted to pay wages less frequently as authorized by the commissioner pursuant to paragraph II, on regular paydays designated in advance by the employer and at no cost to the employee:

(a) In lawful money of the United States[,];

(b) By electronic fund transfer [at no cost to the employee,];

(c) By direct deposit with written authorization of the employee to banks of the employee’s choice[, or];

(d) By a payroll card provided that the employer shall provide to the employee at least one free means to withdraw up to and including the full amount of the employee balance in the employee’s payroll card or payroll card account during each pay period at a financial institution or other location convenient to the place of employment. None of the employer’s costs associated with a payroll card or payroll card account shall be passed on to the employee; or

[(d)] (e) With checks on [banks] a financial institution convenient to the place of employment where suitable arrangements are made for the cashing of such checks by employees for the full amount of the wages due; provided, however, that if an employer elects to pay employees as specified in subparagraphs (b) [or], (c), or (d), the employer shall offer employees the option of being paid as specified in subparagraph [(d)] (e), and further provided that all wages in the nature of health and welfare fund or pension fund contributions required pursuant to a health and welfare fund trust agreement, pension fund trust agreement, collective bargaining agreement, or other agreement[,] adopted for the benefit of employees and agreed to by the employer shall be paid by every such employer within 30 days of the date of demand for such payment, the payment to be made to the administrator or other designated official of the applicable health and welfare or pension trust fund.

II. If an employer offers its employees the option of receiving wages by a payroll card, the employer shall:

(a) Provide to the employee written disclosure in plain language of all the employee’s wage payment options. The written disclosure shall state the terms and conditions of the payroll card account option, including, but not limited to, the requirements set forth in this section and a complete itemized list of all known fees that may be deducted from the employee’s payroll card account by the employer or card issuer. The disclosure shall also state whether third parties may assess transaction fees in addition to the fees assessed by the employee’s payroll card issuer or issuers. In no event shall the employer provide payment of wages to a payroll card that has an expiration date, unless the employer agrees to provide a replacement payroll card before the expiration date at no cost to the employee.

(b) Initiate payment of wages to an employee by electronic fund transfer to a payroll card account only after the employee has voluntarily consented in writing to that method of payment. Consent to payment of wages by electronic fund transfer to a payroll card account shall not be a condition of hire or of continued employment. The written consent signed by the employee shall include the terms and conditions of the payroll card account option.

(c) Provide written notice of any change to any of the terms and conditions of the payroll card or payroll card account, including but not limited to an itemized list of all fees that may have changed, and obtain written assent from the employee that the employee voluntarily consents to receive wages to a payroll card or payroll card account subiect to the changes. The employer shall be responsible for any increase in fees charged to the employee before the employer provides written notice of such changes to the employee.

(d) Provide the employee the option to discontinue receipt of wages by a payroll card or payroll card account at any time, without penalty to the employee.

[I-a.] III. If a subcontractor who is responsible for making health and welfare fund or pension fund contributions fails to make such contributions within the 30-day requirement of paragraph I, the person designated to receive such contributions shall, within 15 days of the date the contributions became due, notify in writing the labor commissioner that the contributions are overdue. The labor commissioner shall notify the prime or general contractor within 15 days from the date of receipt of such notice that such contributions are overdue. The department of labor may pursue the general or prime contractor for such contributions only after all reasonable efforts have been made to secure the contributions from the subcontractor.

[II.] IV. The commissioner may, upon written petition showing good and sufficient reason, permit payment of wages less frequently than weekly, except that it shall be at least once each calendar month. In all instances, payment shall be made regularly on a predesignated date. The commissioner may prescribe the terms and conditions of such permission, and limit the duration thereof.

[III.] V. Vacation pay, severance pay, personal days, holiday pay, sick pay, and payment of employee expenses, when such benefits are a matter of employment practice or policy, or both, shall be considered wages pursuant to RSA 275:42, III, when due.

[IV.] VI. Nothing in this section shall prevent an employer from compensating an employee on a draw against commission basis as defined in RSA 275:42, VII.

[V.] VII. This section shall not be construed to preclude the use of compensatory time off as compensation.

(a) This paragraph applies to:

(1) Governmental entities.

(2) Public sector employees who are under a collective bargaining employment agreement or, if not negotiated through a union or other designated employee representatives, that the agreement or understanding must be reached between employer and employee before the performance of any work.

(b)(1) When the employee requests the use of accrued compensatory time, the request shall be honored within a reasonable period of time unless to do so would unduly disrupt the operation of the employing agency. Mere inconvenience to the employer is an insufficient basis for denial of a request for compensatory time off.

(2) The employer shall not have a policy of requiring the use of compensatory time within a certain period or else the employee will lose it.

(3) Upon termination of employment for any reason, an employee shall be paid for unused compensatory time at the final regular rate received by such employee.

(c)(1) Limitations concerning the ceiling of accrual of compensatory time are as follows:

(A) Public safety, emergency response, or seasonal activity employees may accrue no more than 480 hours of compensatory time for 320 actual overtime hours worked. This limitation shall not apply to office personnel or civilian employees who may perform public safety activities on an emergency basis, even if such employees spend substantially all of their time in a particular work week engaged in such activities.

(B) Other public sector employees may accrue no more than 240 hours of compensatory time for 160 hours of actual time worked.

(2) If an employee has accrued more than the applicable ceiling for compensatory time, such employee shall be paid overtime pay at time and one half of the employee’s regular rate of pay on the designated pay day.

(d) For the purposes of this paragraph:

(1) “Governmental entity” means any branch, department, commission, bureau, agency, or agent of the government of this state or a political subdivision of this state.

(2) “Public safety activities” includes law enforcement, firefighting, or related duties.

(3) “Emergency response activities” includes dispatching of emergency vehicles and personnel, rescue work, and ambulance services.

(4) “Seasonal activity” includes duties performed by employees assigned to work during periods of significantly increased demands on a regular and recurring basis and during this period protected overtime may result in the accumulation of more than 240 compensatory time hours. These periods of short but intense activity shall not qualify as seasonal.

(e) Nothing in this paragraph modifies or affects any federal law regarding compensatory time off including the Fair Labor Standards Act of 1938, 29 [USC] U.S.C. section 207. The purpose of this paragraph is to make compensatory time off available as set forth above under New Hampshire law and not to limit already existing rights and protection. An employer shall provide compensatory time off under whichever statutory provision provides greater rights to employees.

299:3 Effective Date. This act shall take effect 60 days after its passage.

Approved: July 13, 2007

Effective: September 11, 2007