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Senate File 141 - IntroducedA Bill ForAn Act 1permitting the voluntary receipt by employees of payment
2of wages by debit card or pay card and making penalties and
3remedies applicable.
4BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1 Section 1. Section 91A.3, subsection 3, Code 2017, is
2amended to read as follows:
33. a. The wages paid under subsection 1 shall be paid using
4a method authorized by this section.
5b. Wages due may be paidat the employee’s normal place of
6employment during normal employment hours or at a place and
7hour mutually agreed upon by the employer and employee, or the
8employee may elect to have the wages sent for direct deposit,
9on or by the regular payday of the employee, into a financial
10institution designated by the employee.
11c. Upon written request by the employee, wages due may be
12sent to the employee by mail. The employer shall maintain a
13copy of the request for as long as it is effective and for at
14least two years thereafter.
15d. The employee may elect to have wages due sent for
16direct deposit, on or by the regular payday of the employee,
17into a financial institution designated by the employee.An
18employee hired on or after July 1, 2005, may be required, as
19a condition of employment, to participate in direct deposit
20of the employee’s wages in a financial institution of the
21employee’s choice unless any of the following conditions exist:
22(1) The costs to the employee of establishing and
23maintaining an account for purposes of the direct deposit would
24effectively reduce the employee’s wages to a level below the
25minimum wage provided under section 91D.1.
26(2) The employee would incur fees charged to the employee’s
27account as a result of the direct deposit.
28(3) The provisions of a collective bargaining agreement
29mutually agreed upon by the employer and the employee
30organization prohibit the employer from requiring an employee
31to sign up for direct deposit as a condition of hire.
32e. (1) An employer may offer payment of wages by debit
33card or pay card pursuant to this section only if all of the
34following requirements are met:
35(a) The employee voluntarily agrees in writing to payment
-1-1by debit card or pay card after the employer offers to pay the
2employee’s wages by debit card or pay card and notifies the
3employee in writing that receipt of payment by debit card or
4pay card is voluntary on the employee’s part and listing the
5other method or methods of payment offered by the employer.
6(b) The employee has the option of withdrawing all wages
7due once per pay period, but not more frequently than once per
8week, without incurring any charge, if such withdrawal of wages
9is conducted at a financial institution’s office location. For
10purposes of this subparagraph division, “financial institution”
11 means the same as defined in section 537.1301.
12(c) The employee has the option to have the employee’s name
13included on the debit card or pay card.
14(2) The employer shall retain copies of the employee’s
15written consent and the notice of charges for the period for
16which the consent is effective and for at least two years
17thereafter.
18(3) The employer shall substitute another payment method
19in accordance with this section no later than two pay periods
20after receiving a request from an employee for termination of
21payment by debit card or pay card.
22b. f. If the employer fails to pay an employee’s wages on
23or by the regular payday in accordance with this subsection,
24the employer is liable for the amount of any overdraft charge
25if the overdraft is created on the employee’s account because
26of the employer’s failure to pay the wages on or by the regular
27payday. The overdraft charges may be the basis for a claim
28under section 91A.10 and for damages under section 91A.8.
29 Sec. 2. Section 91A.6, subsection 4, Code 2017, is amended
30to read as follows:
314. On each regular payday, the employer shall send to
32each employee by mail or shall provide at the employee’s
33normal place of employment during normal employment hours a
34statement showing the beginning and ending dates of the pay
35period to which the statement applies, the hours the employee
-2-1worked, the wages earned by the employee, and deductions made
2for the employee. However, the employer need not provide
3information on hours worked for employees who are exempt
4from overtime under the federal Fair Labor Standards Act,
5as defined in 29 C.F.R. pt.541, unless the employer has
6established a policy or practice of paying to or on behalf
7of exempt employees overtime, a bonus, or a payment based on
8hours worked, whereupon the employer shall send or otherwise
9provide a statement to the exempt employees showing the hours
10the employee worked or the payments made to the employee
11by the employer, as applicable. An employer who provides
12each employee access to view an electronic statement of
13the employee’s earnings and provides the employee free and
14unrestricted access to a printer to print the employee’s
15statement of earnings, if the employee chooses, is in
16compliance with this subsection.
17EXPLANATION
18The inclusion of this explanation does not constitute agreement with
19the explanation’s substance by the members of the general assembly.
20This bill permits an employer to offer payment of wages by
21debit card or pay card under Code chapter 91A, the Iowa wage
22payment collection law, if certain requirements are met.
23The employee must voluntarily agree in writing to payment
24by debit card or pay card after the employer offers to pay the
25employee’s wages by debit card or pay card and notifies the
26employee in writing that receipt of payment by debit card or
27pay card is voluntary on the employee’s part and listing the
28other method or methods of payment offered by the employer.
29The employee must have the option of withdrawing all wages due
30once per pay period, but not more frequently than once per
31week, without incurring any charge, if such withdrawal of wages
32is conducted at a financial institution’s office location. The
33employee must also have the option to have the employee’s name
34included on the debit card or pay card.
35The bill requires an employer to retain copies of the
-3-1employee’s written consent and the notice of charges for the
2period for which the consent is effective and for at least two
3years thereafter.
4The bill requires an employer to substitute another payment
5method in accordance with this Code section no later than two
6pay periods after receiving a request from an employee for
7termination of payment by debit card or pay card.
8The bill provides that regular payday statements provided to
9employees by employers must include the beginning and ending
10dates of the pay period to which the statement applies.
11Under Code chapter 91A, unpaid wages or expenses, along with
12liquidated damages, court costs, and attorney fees, may be
13recovered by the employee or the labor commissioner by civil
14action. An employer who violates Code chapter 91A is also
15subject to a civil penalty of not more than $500 per pay period
16for each violation.
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2of wages by debit card or pay card and making penalties and
3remedies applicable.
4BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1 Section 1. Section 91A.3, subsection 3, Code 2017, is
2amended to read as follows:
33. a. The wages paid under subsection 1 shall be paid using
4a method authorized by this section.
5b. Wages due may be paidat the employee’s normal place of
6employment during normal employment hours or at a place and
7hour mutually agreed upon by the employer and employee, or the
8employee may elect to have the wages sent for direct deposit,
9on or by the regular payday of the employee, into a financial
10institution designated by the employee.
11c. Upon written request by the employee, wages due may be
12sent to the employee by mail. The employer shall maintain a
13copy of the request for as long as it is effective and for at
14least two years thereafter.
15d. The employee may elect to have wages due sent for
16direct deposit, on or by the regular payday of the employee,
17into a financial institution designated by the employee.An
18employee hired on or after July 1, 2005, may be required, as
19a condition of employment, to participate in direct deposit
20of the employee’s wages in a financial institution of the
21employee’s choice unless any of the following conditions exist:
22(1) The costs to the employee of establishing and
23maintaining an account for purposes of the direct deposit would
24effectively reduce the employee’s wages to a level below the
25minimum wage provided under section 91D.1.
26(2) The employee would incur fees charged to the employee’s
27account as a result of the direct deposit.
28(3) The provisions of a collective bargaining agreement
29mutually agreed upon by the employer and the employee
30organization prohibit the employer from requiring an employee
31to sign up for direct deposit as a condition of hire.
32e. (1) An employer may offer payment of wages by debit
33card or pay card pursuant to this section only if all of the
34following requirements are met:
35(a) The employee voluntarily agrees in writing to payment
-1-1by debit card or pay card after the employer offers to pay the
2employee’s wages by debit card or pay card and notifies the
3employee in writing that receipt of payment by debit card or
4pay card is voluntary on the employee’s part and listing the
5other method or methods of payment offered by the employer.
6(b) The employee has the option of withdrawing all wages
7due once per pay period, but not more frequently than once per
8week, without incurring any charge, if such withdrawal of wages
9is conducted at a financial institution’s office location. For
10purposes of this subparagraph division, “financial institution”
11 means the same as defined in section 537.1301.
12(c) The employee has the option to have the employee’s name
13included on the debit card or pay card.
14(2) The employer shall retain copies of the employee’s
15written consent and the notice of charges for the period for
16which the consent is effective and for at least two years
17thereafter.
18(3) The employer shall substitute another payment method
19in accordance with this section no later than two pay periods
20after receiving a request from an employee for termination of
21payment by debit card or pay card.
22b. f. If the employer fails to pay an employee’s wages on
23or by the regular payday in accordance with this subsection,
24the employer is liable for the amount of any overdraft charge
25if the overdraft is created on the employee’s account because
26of the employer’s failure to pay the wages on or by the regular
27payday. The overdraft charges may be the basis for a claim
28under section 91A.10 and for damages under section 91A.8.
29 Sec. 2. Section 91A.6, subsection 4, Code 2017, is amended
30to read as follows:
314. On each regular payday, the employer shall send to
32each employee by mail or shall provide at the employee’s
33normal place of employment during normal employment hours a
34statement showing the beginning and ending dates of the pay
35period to which the statement applies, the hours the employee
-2-1worked, the wages earned by the employee, and deductions made
2for the employee. However, the employer need not provide
3information on hours worked for employees who are exempt
4from overtime under the federal Fair Labor Standards Act,
5as defined in 29 C.F.R. pt.541, unless the employer has
6established a policy or practice of paying to or on behalf
7of exempt employees overtime, a bonus, or a payment based on
8hours worked, whereupon the employer shall send or otherwise
9provide a statement to the exempt employees showing the hours
10the employee worked or the payments made to the employee
11by the employer, as applicable. An employer who provides
12each employee access to view an electronic statement of
13the employee’s earnings and provides the employee free and
14unrestricted access to a printer to print the employee’s
15statement of earnings, if the employee chooses, is in
16compliance with this subsection.
17EXPLANATION
18The inclusion of this explanation does not constitute agreement with
19the explanation’s substance by the members of the general assembly.
20This bill permits an employer to offer payment of wages by
21debit card or pay card under Code chapter 91A, the Iowa wage
22payment collection law, if certain requirements are met.
23The employee must voluntarily agree in writing to payment
24by debit card or pay card after the employer offers to pay the
25employee’s wages by debit card or pay card and notifies the
26employee in writing that receipt of payment by debit card or
27pay card is voluntary on the employee’s part and listing the
28other method or methods of payment offered by the employer.
29The employee must have the option of withdrawing all wages due
30once per pay period, but not more frequently than once per
31week, without incurring any charge, if such withdrawal of wages
32is conducted at a financial institution’s office location. The
33employee must also have the option to have the employee’s name
34included on the debit card or pay card.
35The bill requires an employer to retain copies of the
-3-1employee’s written consent and the notice of charges for the
2period for which the consent is effective and for at least two
3years thereafter.
4The bill requires an employer to substitute another payment
5method in accordance with this Code section no later than two
6pay periods after receiving a request from an employee for
7termination of payment by debit card or pay card.
8The bill provides that regular payday statements provided to
9employees by employers must include the beginning and ending
10dates of the pay period to which the statement applies.
11Under Code chapter 91A, unpaid wages or expenses, along with
12liquidated damages, court costs, and attorney fees, may be
13recovered by the employee or the labor commissioner by civil
14action. An employer who violates Code chapter 91A is also
15subject to a civil penalty of not more than $500 per pay period
16for each violation.
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