SB-1281, As Passed Senate, December 13, 2012

HOUSE SUBSTITUTE FOR

SENATE BILL NO. 1281

     A bill to amend 1978 PA 390, entitled

"An act to regulate the time and manner of payment of wages and

fringe benefits to employees; to prescribe rights and

responsibilities of employers and employees, and the powers and

duties of the department of labor; to require keeping of records;

to provide for settlement of disputes regarding wages and fringe

benefits; to prohibit certain practices by employers; to prescribe

penalties and remedies; and to repeal certain acts and parts of

acts,"

by amending section 6 (MCL 408.476), as amended by 2010 PA 323.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

     Sec. 6. (1) An employer or agent of an employer may pay wages

to an employee by any of the following methods that protect the

earnings of the employee from garnishment as required by 15 USC

1673 , to the same extent they would be exempt while held by the

employer:

     (a) Payment in United States currency.

     (b) Payment by a negotiable check or draft payable on

presentation at a financial institution or other established place

of business without discount in United States currency.

     (c) Direct deposit or electronic transfer to the employee's

account at a financial institution.

     (d) Issuing a payroll debit card that complies with subsection

(6).

     (2) Except as provided in section 283a of the management and

budget act, 1984 PA 431, MCL 18.1283a, or in subsection (4), an

employer or agent of an employer shall not deposit an employee's

wages in a bank, credit union, or savings and loan association

without the full, free, and written consent of the employee,

obtained without intimidation, coercion, or fear of discharge or

reprisal for refusal to permit the deposit.

     (3) Except as provided in subsection (4), an employer or agent

of an employer shall not issue a payroll debit card to an employee

under subsection (1)(d) without the full, free, and written consent

of the employee, obtained without intimidation, coercion, or fear

of discharge or reprisal for refusal to accept the payroll debit

card. However, an employer paying wages by payroll debit card to 1

or more of its employees as of January 1, 2005 may pay wages to any

of its employees by payroll debit card without obtaining the

consent described in this act.

     (4) An employer or agent of an employer may require employees

to receive wages only through direct deposit or a payroll debit

card that complies with subsection (6) if the employer has provided

the employee with all of the following:

     (a) A written form that allows the employee the option to

receive wages either by direct deposit to the employee's account at

a financial institution or through a payroll debit card.

     (b) A statement indicating that, except for an employee

currently paid by direct deposit or any employee of an employer

paying wages by payroll debit card to 1 or more of its employees on

January 1, 2005, failure to return the form within 30 days with the

account information necessary to implement direct deposit will be

presumed to indicate consent to receiving wages through a payroll

debit card. If an employee is currently paid by direct deposit, the

method of payment shall not be changed to payroll debit card

without written consent of the employee.

     (c) Written disclosure of all of the following concerning the

payroll debit card:

     (i) The terms and conditions for use, including an itemized

list of any and all fees.

     (ii) The methods for accessing wages without charge.

     (iii) A statement that, if the payroll debit card is used

outside of the specified network of automatic teller machines, both

the payroll card issuer and the operator of the automatic teller

machine may impose charges.

     (iv) The methods to obtain free balance inquiries.

     (v) The employee's right to elect to change the method of

receiving wages at any time, as provided in subsection (5).

     (vi) That the payroll debit card does not provide access to a

savings or checking account.

     (5) An employee may request a change in the method of

receiving wages established under subsection (4) at any time. The

employer shall take no longer than 1 pay period to implement the

change after the employer receives the request and any information

necessary to implement the request. An employer shall allow an

employee to select payment by direct deposit or electronic transfer

under subsection (4) freely, without intimidation, coercion, or

fear of discharge or reprisal for the choice.

     (6) An employer shall not pay wages by issuing a payroll debit

card unless the payroll debit card has all of the following

characteristics:

     (a) Entitles the employee to make at least 1 withdrawal or

transfer without charge each pay period, but not more frequently

than once per week, for any amount the employee elects up to the

balance accessible through the card.

     (b) Allows no changes in fees or terms of service unless the

employee has received a written notice at least 21 days in advance

of the date that the changes take effect identifying the changes.

     (c) Provides a method for the employee to make an unlimited

number of balance inquiries without charge, either electronically

or by telephone.

     (d) Is not linked to any form of credit, including a loan

against future pay or a cash advance on future pay.

     (7) An employer shall not require an employee to pay any fees

or costs incurred by the employer in connection with paying wages

or establishing a process for paying wages by a method described in

subsection (1)(c) or (d).

     (8) As used in this section:

     (a) "Federally insured financial institution" means a state or

nationally chartered bank or a state or federally chartered savings

and loan association, savings bank, or credit union whose deposits

are insured by an agency of the United States government. and which

maintains a principal office or branch office located in this state

under the laws of this state or the United States.

     (b) "Payroll debit card" means a stored-value card issued by

or on behalf of a federally insured financial institution that

provides an employee with immediate access for withdrawal or

transfer of his or her wages through a network of automatic teller

machines. The term includes a card commonly known as a payroll

debit card, payroll card, and paycard.