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New NY Regulations Affect Employees Paid by Direct Deposit

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There’s another new regulation coming the way of New York employers, effective March 7, 2017. This one may require employers to change the way they handle their paydays.

How will this affect my business?

First, employers no longer can make a prospect’s job offer conditioned on her agreeing to receive her paycheck by direct deposit. She gets a choice.

Second, there are stricter notice requirements for employees receiving direct deposit paychecks. Employers must provide written notice that includes:

  • All options for receiving wages, including hard copy check, direct deposit, debit card, etc.
  • A statement saying the employee isn’t required to accept wages by direct deposit
  • A promise that the employee isn’t charged a fee for receiving her check by direct deposit
  • A list of places in reasonable proximity to the workplace or the employee’s residence where she can access and withdraw her wages

What else do I need to know?

Employers now must obtain written consent from their employees in order to pay them by direct deposit, and an employee may revoke that consent at any time. And it’s important to retain a copy of the written consent for at least six year after the employee leaves your company.

The new regulation poses additional requirements if you pay your employees by debit card.

Can’t I leave all this to my payroll service?

Well, you could, but the duty is on you, the employer. This is particularly true for the notice and record-keeping requirements.

New York employers must change their policies and practices, if necessary, before March 7th to ensure compliance. Call us if you need assistance with these changes.

Lisa Coppola

Written by Lisa Coppola

Founder of The Coppola Firm

Lisa A. Coppola, Esq. understands the challenges her clients face, whether they’re starting a new business, taking their existing operations in a new direction, or facing a claim or threat.

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