Hawaii Issues Amended Notice Re: Use of Payroll Debit Cards

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UPDATED: On July 8, Hawaii’s Governor signed into law H.B. 1814 and it is effective immediately. Among other things, it authorizes employers to pay wages to an employee using a pay card if certain requirements are met.

Employers’ use of payroll cards to pay employee wages and other benefits is tremendously popular, for among other reasons, the convenience that the cards provide for both employers and employees. If you pay your employees by payroll card in Hawaii, keep an on eye on House Bill 1814. On April 3, 2014, the Hawaii Department of Labor and Industrial Relations issued an Amended Notice Re: Department of Labor and Industrial Relations Guidelines on the Use of Payroll Debit Cards, warning that, effective September 1, 2014, it is suspending its April 13, 2006 Declaratory Ruling, which administratively allows the use of payroll, pay, or debit cards for the payment of wages to employees. (A copy of the April 13, 2006 Declaratory Ruling is appended to the Amended Notice.) Unless the pending legislation permits it, employers will no longer be permitted to use payroll cards starting on September 1, 2014. The Department acknowledged that legislation on point, specifically H.B. 1814 (2014 Reg. Sess.) relating to payment of wages currently is being deliberated. H.B. 1814 was introduced on January 17, 2014, passed by the House on March 4, 2014 and the Senate on April 8, 2014, and transmitted to the Governor on May 5, 2014.

Additional Sources: Consumer Financial Protection Bureau Bulletin 2013-10; Comptroller of the Currency, Payroll Cards: An Innovative Product for Reaching the Unbanked and Underbanked (June 2005); Construction Executive, To Pay, Or Not To Pay, By Payroll Debit Card (Oct. 28, 2013)