SF 2350 (LSB 6191SV (3) 85)

SENATE FILE 2350

BY  COMMITTEE ON WAYS AND MEANS

(SUCCESSOR TO SSB 3214)

A BILL FOR

An Act relating to payment of wages.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 91A.3, subsection 3, Code 2014, is amended to read as follows:
   3.  a.  The wages paid under subsection 1 shall be paid using a method authorized by this section.
   b.  Wages due may be paid at the employee’s normal place of employment during normal employment hours or at a place and hour mutually agreed upon by the employer and employee, or the employee may elect to have the wages sent for direct deposit, on or by the regular payday of the employee, into a financial institution designated by the employee.
   c.  Upon written request by the employee, wages due may be sent to the employee by mail. The employer shall maintain a copy of the request for as long as it is effective and for at least two years thereafter.
   d.  The employee may elect to have wages due sent for direct deposit, on or by the regular payday of the employee, into a financial institution designated by the employee.  An employee hired on or after July 1, 2005, may be required, as a condition of employment, to participate in direct deposit of the employee’s wages in a financial institution of the employee’s choice unless any of the following conditions exist:
   (1)  The costs to the employee of establishing and maintaining an account for purposes of the direct deposit would effectively reduce the employee’s wages to a level below the minimum wage provided under section 91D.1.
   (2)  The employee would incur fees charged to the employee’s account as a result of the direct deposit.
   (3)  The provisions of a collective bargaining agreement mutually agreed upon by the employer and the employee organization prohibit the employer from requiring an employee to sign up for direct deposit as a condition of hire.
   e.  (1)  If the employer offers to pay wages by debit card or pay card, the employee may elect to have wages due so paid if all of the following conditions are met:
   (a)  The employee is provided written notice of all possible charges for use of the debit card or pay card when payment by debit card or pay card is offered to the employee, and in advance of any change in the amount or frequency of such charges.
   (b)  The employee voluntarily agrees in writing to payment by debit card or pay card.
   (c)  The employee has the option of withdrawing all wages due once per pay period without incurring any charge for use of the debit card or pay card.
   (2)  The employer shall retain copies of the employee’s written consent and the notice of charges for the period for which the consent is effective and for at least two years thereafter.
   (3)  The employer shall substitute another payment method in accordance with this section no later than two pay periods after receiving a request for termination of payment by debit card or pay card from an employee.
   b.  f.  If the employer fails to pay an employee’s wages on or by the regular payday in accordance with this subsection, the employer is liable for the amount of any overdraft charge if the overdraft is created on the employee’s account because of the employer’s failure to pay the wages on or by the regular payday. The overdraft charges may be the basis for a claim under section 91A.10 and for damages under section 91A.8.
    Sec. 2.  Section 556.9, subsection 1, Code 2014, is amended to read as follows:
   1.  All intangible personal property, not otherwise covered by this chapter, including any income or increment earned on the property and deducting any lawful charges, that is held or owing in this state in the ordinary course of the holder’s business and has remained unclaimed by the owner for more than three years after it became payable or distributable is presumed abandoned. However, unpaid wages, regardless of the medium of payment in which they are paid, including wages represented by payroll checks or other compensation for personal services owing in the ordinary course of the holder’s business, that remain unclaimed by the owner for more than one year after becoming payable are presumed abandoned.  For purposes of this chapter, the employer of an employee to whom unpaid wages are due shall be considered the holder of such wages, regardless of whether the employer has engaged a service provider to perform payroll services.
EXPLANATION
The inclusion of this explanation does not constitute agreement with

the explanation’s substance by the members of the general assembly.
   This bill permits employees to elect to have wages due paid by debit card or pay card under Code chapter 91A, the Iowa wage payment collection law, if an employer offers to do so and if certain conditions are met. The employee must be provided written notice of all possible charges for use of the debit card or pay card when payment by debit card or pay card is offered to the employee, and in advance of any change in the amount or frequency of such charges. The employee must voluntarily agree in writing to payment by debit card or pay card. The employee must have the option of withdrawing all wages due once per pay period without incurring any charge for use of the debit card or pay card.
   The bill requires an employer to retain copies of the employee’s written consent and the notice of charges for the period for which the consent is effective and for at least two years thereafter. The bill requires an employer to substitute another payment method no later than two pay periods after receiving a request for termination of payment by debit card or pay card from an employee.
   Under current Code chapter 556, relating to disposition of unclaimed property, unpaid wages that remain unclaimed by the owner for more than one year after becoming payable are presumed abandoned. A holder of property presumed abandoned is responsible for reporting such property to the treasurer of state and for complying with other requirements under Code chapter 556. The bill provides that this presumption applies regardless of the medium of payment in which the wages are paid. The bill also provides that, for the purposes of Code chapter 556, the employer of an employee to whom unpaid wages are due shall be considered the holder of such wages, regardless of whether the employer has engaged a service provider to perform payroll services.