Legislature(2025 - 2026)BARNES 124
03/19/2025 03:15 PM House LABOR & COMMERCE
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| Audio | Topic |
|---|---|
| Start | |
| HB123 | |
| SB79 | |
| HB30 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 132 | TELECONFERENCED | |
| += | HB 123 | TELECONFERENCED | |
| + | SB 79 | TELECONFERENCED | |
| += | HB 30 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
SB 79-PAYMENT OF WAGES; PAYROLL CARD ACCOUNT
[Contains discussion of HB 99.]
3:39:13 PM
CO-CHAIR HALL announced that the next order of business would be
SENATE BILL NO. 79, "An Act relating to wage payments."
3:39:48 PM
SENATOR JESSE BJORKMAN, Alaska State Legislature, presented SB
79 on behalf of the bill sponsor, the Senate Labor and Commerce
Standing Committee, on which Senator Bjorkman serves as chair.
He gave the sponsor statement for SB 79 [included in the
committee file], which read as follows [original punctuation
provided]:
Senate Bill 79 would allow employers to credit wages
to an employee on a payroll card account if an
employee has voluntarily authorized this, or if an
employee has not authorized deposit of their wages to
a specified account. This legislation gives employers
another option to pay their employees that could be
less expensive than other forms of payment and avoids
the difficulties of distributing paper checks.
SB 79 requires employers to be transparent when giving
employees the option to open a payroll card account.
The bill requires that employers provide employees
with a list of fees they could
encounter with the card and a cost-free method to
access their wages, as having an ATM card that is not
connected to a specific bank can require fees for
withdrawal. Employers also cannot offer a payroll card
that charges fees for an employee's application,
initiation, or participation in the account.
The bill gives employees that don't have a bank
account another option to accept payment of their
wages and a mechanism to avoid check cashing fees.
Payroll cards will be used without fees to pay for any
store purchases and one cost-free ATM withdrawal in an
amount up to the employee's net wages per pay-period.
I urge your support of Senate Bill 79
SENATOR BJORKMAN gave a brief history of the bill in the prior
legislature, noting that it failed to pass.
3:41:53 PM
SAVAYA BIEBER, Staff, Senator Jesse Bjorkman, Alaska State
Legislature, on behalf of the bill sponsor, the Senator Labor
and Commerce Standing Committee, on which Senator Bjorkman
serves as chair, gave the sectional analysis for SB 79 [included
in the committee file], which read as follows [original
punctuation provided]:
Section 1: Amends AS 23.10.040(a) to add AS 23.10.044
allowing an employer to pay via payroll
card account.
Section 2: AS 23.10 is amended by adding section AS
23.10.044
(a) Allows an employer to pay wages to a payroll card
account if an employee has voluntarily
authorized or if an employee has not authorized
deposit of their wages to a bank account.
(b) States an employer paying wages to a payroll card
account shall notify the employee of the
terms and conditions of payroll cards.
(c) A payroll card account must provide an employee
with at least one cost-free withdrawal
each pay period, up to the amount of the employee's
net wages, and a cost-free mechanism
to check the account balance through a phone system
and an additional unlimited cost-free
electric mechanism to check account balances.
(d) An employer may not offer a payroll card account
that charges fees for employee
application or participation in the account, or
issuance of an employee's card and one
replacement each calendar year, or transfer of
employee wages to the account, or point-ofsale
purchase transactions.
(e) An employer may not offer a payroll card account
unless the wages are insured on a passthrough
basis by an entity that insures bank deposits.
(f) This section protects employees' right to bargain
collectively through representatives of
their choice to establish mechanisms for payments of
wages.
(g) Defines "payroll card" and "payroll card account"
in statute.
3:43:57 PM
AMY MILLER, Senior Director, Government Affairs, Automatic Data
Processing, Inc. (ADP), gave invited testimony in support of SB
79. She explained that ADP was the nation's largest provider of
human capital management solutions, supporting Human Resources
(HR), payroll, and benefits administration. She reported that
ADP pays one in six employees in the United States. She stated
that SB 79 would eliminate the requirement that Alaska employers
offer paper paychecks as a form of wage payment. Under SB 79,
employers would have the right to offer wages in the form of
direct deposit or payment cards. She clarified that the
proposed legislation does not prevent employees from receiving
pay via direct deposit, nor does it prohibit employers from
distributing paper checks. She further noted that SB 79 would
protect the right to collective bargaining arrangements and
would not impact payments made to state employees.
MS. MILLER asserted that alternatives to paper checks are more
timely, consistent, and secure. She noted that some employers,
if forced to offer paper checks, may be unable to fulfill the
legal requirements of timely pay laws; weather events or slow
mail processing can prevent employees from picking up their
paper checks. She noted that employees who do not qualify for a
bank account could still receive a payroll card from their
employer, asserting that payroll cards offer employees consumer
protection and convenience. She stated that payroll cards can
be used for online bill payments, online shopping, and
electronic travel arrangements, such as flights, hotels, or
rental cars. She further stated that payroll cards provide
protection against unauthorized use and fraud and cannot be
overdrawn.
MS. MILLER asserted that nearly all government payments are
electronic, such as tax refunds, social security payments, et
cetera. She cited the National Automated Clearing House
Association, reporting that 93 percent of American workers are
paid via electronic direct deposit. She additionally reported
that electronic pay is the only permitted form of wage payment
in many states, and at least 30 states have already implemented
payroll cards. She concluded by stating that employees often
welcome the change and are adaptable. She urged committee
members to pass SB 79 and thanked the committee.
3:48:12 PM
REPRESENTATIVE COULOMBE asked whether state employees would be
eligible for payroll cards under the proposed legislation.
3:48:27 PM
MS. MILLER reiterated that SB 79 would not have an impact on the
payment of wages to State of Alaska employees and further stated
that it would be up to the state if it wanted to allow payroll
cards for its employees.
3:48:39 PM
REPRESENTATIVE CARRICK noted that Section 2, [subsection] (a) of
SB 79 would allow employers to either pay wages to payroll card
account if an employee has voluntarily authorized that action or
an employer would deposit wages into a bank account if an
employee has not authorized wages to be paid into a payroll card
account. She asked which scenario would be more common under
the proposed legislation.
3:49:35 PM
MS. MILLER offered her belief that the most popular of the two
scenarios would be the direct deposit and noted that most
employees were already on a direct deposit option. She
explained that the payroll card would serve as an alternative
for those who are "unbanked." Additionally, she explained that
unbanked individuals who receive a payroll card could make
purchases online.
3:50:12 PM
REPRESENTATIVE COULOMBE asked whether an employee would receive
a single reloadable payroll card or a new payroll card every
payday.
MS. MILLER replied that the employee would receive a reloadable
payroll card.
REPRESENTATIVE COULOMBE noted that the legislation prohibits
employers from offering a payroll card account that would charge
fees. She asked who would be responsible for the payroll card
fees.
MS. MILLER responded that the issuer, such as Visa or
MasterCard, would be responsible for the payroll card fees. She
offered her belief that mobile check cashing and cash reloading
are typical kinds of associated fees. She further stated that
employees could use the payroll cards anywhere that would accept
a check without incurring fees.
3:51:31 PM
CO-CHAIR FIELDS requested a list of fees that consumers could
pay under SB 79 and queried how payroll cards interact with
banks. He asked whether ADP provides banking services.
MS. MILLER responded that ADP does not provide banking services
but that it does provide payroll cards.
MS. MILLER, in response to a follow-up question from Co-Chair
Fields clarified that ADP does not provide any other banking
services.
3:52:28 PM
REPRESENTATIVE COULOMBE asked whether payroll card users would
pay a fee for withdrawing cash from an automated teller machine
(ATM).
MS. MILLER replied that payroll card users are allowed one free
ATM withdrawal per pay period. She noted that there are in-
network ATMs that offer free, unlimited withdrawals.
Additionally, she stated that payroll card users could go to a
teller at any brick-and-mortar bank that accepts Visa or
MasterCard for unlimited cash withdrawals with no fees. She
noted that payroll card users could not use an automated teller
machine (ATM) inside of a bank.
3:53:39 PM
REPRESENTATIVE SADDLER asked whether the Federal Deposit
Insurance Corporation (FDIC) regulates payroll cards. He
further asked whether federal banking regulations are applicable
to payroll cards. He remarked that the legislation was being
presented as a simplified banking service.
MS. MILLER responded that there are regulations regarding anti-
theft protection [for payroll cards]. Additionally, she stated
that she would do more research and follow-up with the
committee.
3:54:33 PM
REPRESENTATIVE NELSON commented that access to payroll cards was
helpful for anyone without a bank account. He noted he was paid
through a payroll card at his first job.
3:54:54 PM
CO-CHAIR FIELDS offered his understanding that the Consumer
Financial Protection Bureau (CFPB) was "essentially shut down."
He asked whether CFPB had any role related to payroll cards.
MS. MILLER replied that she believed CFPB may have had a broader
federal role in providing consumer protection for payroll cards
and stated that the states typically provide consumer protection
for payroll cards. She added that the typical protections one
might expect with credit and debit cards are the same as for
payroll cards. Additionally, she stated that any fees
associated with payroll cards are no different from fees
associated with credit or debit cards, such as merchant-
generated fees or transaction fees.
3:56:17 PM
MS. BIEBER, in response to Representative Saddlers prior
question, referred to page 2, line 24, [subsection] (e) and read
"an employer may not offer a payroll card account unless
employee wages or other forms of compensation credited to the
account are insured on a passed through basis to the employee by
the Federal Deposit Insurance Corporation, the National Credit
Union Administration, or another entity that insures bank
deposits."
3:56:49 PM
SENATOR BJORKMAN, in response to Representative Saddler's prior
question, noted that state legislation regarding cryptocurrency
and money transmission modernization should also consider
including gift cards in regulation. He stated that was not the
purpose of SB 79.
3:57:33 PM
REPRESENTATIVE CARRICK referred to [subsection] (f) of SB 79 and
asked if that language was in the previous iteration of the
proposed legislation. She noted that the value of SB 79
appeared to be in "employer options" and "employee choice."
3:58:16 PM
SENATOR BJORKMAN offered his understanding that SB 79 was
identical to the previous iteration of the proposed legislation.
He noted that the provision in [subsection] (f) would preserve
collective bargaining rights of employees regarding payroll
format. He added that it is the employee's right to advocate
for and negotiate with employers regarding how they are paid.
He stated, "That provision simply protects rights of employees
who are organized and bargain collectively with their employer."
3:59:16 PM
REPRESENTATIVE CARRICK noted that members of a collective
bargaining unit might disagree with the form of pay they might
collectively accept. She suggested that the proposed
legislation was supposed to be an "employer-offered option."
SENATOR BJORKMAN, in response to Representative Carrick's
question regarding the consideration of SB 79 as conforming
language, responded yes.
4:00:09 PM
REPRESENTATIVE SADDLER asked whether HB 99 would need to be
modified were SB 79 to pass the legislature.
SENATOR BJORKMAN responded that SB 79 would not intersect with
HB 99.
4:01:20 PM
CO-CHAIR FIELDS queried the "real-world impact" of the proposed
legislation.
4:01:57 PM
MS. MILLER stated that 20 other states have passed paperless pay
legislation. She stated that it is helpful for employers, given
that the cost of issuing checks can range from $4 to $20, which
could be expensive for a small business owner. She remarked
that most employees opt for direct deposit and the payroll cards
serve as an alternative.
CO-CHAIR FIELDS further inquired whether there had been a
positive impact on reducing the rate of unbanked individuals or
other consumer gains in states where similar legislation has
been enacted.
MS. MILLER replied that the payroll cards would not "offer the
option to be banked," but the alternative allows unbanked
individuals to participate in online shopping.
4:04:00 PM
CO-CHAIR HALL announced that SB 79 was held over.
| Document Name | Date/Time | Subjects |
|---|---|---|
| SB 79 HL&C Hearing Packet 3.19.2025.pdf |
HL&C 3/19/2025 3:15:00 PM |
SB 79 |
| HB 30 Amendment G.1.pdf |
HL&C 3/19/2025 3:15:00 PM |
HB 30 |
| HB 30 Amendment G.2.pdf |
HL&C 3/19/2025 3:15:00 PM |
HB 30 |
| HB 30 Amendment G.3.pdf |
HL&C 3/19/2025 3:15:00 PM |
HB 30 |
| HB 30 Amendment G.4.pdf |
HL&C 3/19/2025 3:15:00 PM |
HB 30 |
| HB 30 Amendment G.5.pdf |
HL&C 3/19/2025 3:15:00 PM |
HB 30 |
| HB 30 Amendment G.6.pdf |
HL&C 3/19/2025 3:15:00 PM |
HB 30 |
| HB 123-Amendment I.2.pdf |
HL&C 3/19/2025 3:15:00 PM |
HB 123 |
| HB123 Ver A Supporting Doc-FAQs 3.19.25.pdf |
HL&C 3/19/2025 3:15:00 PM |
HB 123 |
| HB123 Ver A Supporting Doc-Vehicle Rental Statutes 3.19.25.pdf |
HL&C 3/19/2025 3:15:00 PM |
HB 123 |
| HB123 VerA Supporting Doc-DOR Brief Analysis of Turo 3.19.25.pdf |
HL&C 3/19/2025 3:15:00 PM |
HB 123 |