Legislature(2023 - 2024)BARNES 124
03/04/2024 03:15 PM House LABOR & COMMERCE
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| Audio | Topic |
|---|---|
| Start | |
| HB289 | |
| SB89 | |
| HB285 | |
| HB203 | |
| HB290 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 203 | TELECONFERENCED | |
| + | SB 89 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | HB 290 | TELECONFERENCED | |
| += | HB 289 | TELECONFERENCED | |
| *+ | HB 285 | TELECONFERENCED | |
HB 203-PAYMENT OF WAGES; PAYROLL CARD ACCOUNT
4:12:37 PM
CHAIR SUMNER HOUSE announced that the next order of business
would be HOUSE BILL NO. 203, "An Act relating to wage payments."
4:13:04 PM
CLARK BICKFORD, Staff, Representative Jesse Sumner, Alaska State
Legislature, on behalf of Representative Sumner, prime sponsor,
presented HB 203. He paraphrased the bill's sponsor statement
[included in the committee packet], which read as follows
[original punctuation provided]:
Prior to the modern era, all payroll in private sector
employment was conducted by traditional means, that is
paying employees either in actual currency or with a
paper paycheck delivered or mailed to an individual
employee on payday. With time and modern technology
advancements, many private employers and government
entities have moved to electronic deposit, or
electronic funds transfer, for paying their employees.
In Alaska, current law does not permit an employer to
select an electronic payroll deposit system unless and
until every employee specifically elects to be paid
electronically. In other words, an employer who wishes
to move the company to electronic wage payment may not
be permitted to do so. Any given employer may have
very good business reasons to switch the company's
payroll system, including, business efficiency, cost-
savings, environmental concerns about excess paper
usage, or security of wage payment transactions.
Those employers in the private sector who elect to
move to an electronic payment system should be
entitled to do so. That decision rests with the
employer, as with any of the many work-related
conditions of employment (choice of uniform; work
hours and scheduling; conduct on the job; job duties
and goals; leave time; vacation allowances; etc.
etc.). The choice for an employer to pay employees via
electronic means is no different, and should be
permitted, if the employer so chooses.
Note that nothing in the proposed legislation would
require an employer to switch to electronic payment of
wages. It would simply authorize that decision, if the
employer elects to do so. Any employer who wishes to
continue paying employees with traditional paper
paycheck methods may still do so.
Should an employee either not have a bank account or
prefer an alternative to electronic funds transfer,
that employee could elect to be paid via payroll card
instead. That payroll card would be issued under a
Visa or Mastercard partner, and would operate just
like an ATM card, now accepted in lieu of cash almost
universally. The payroll card is FDIC-insured, and
secure for the employee receiving payments in this
way.
4:15:21 PM
MR. BICKFORD began a sectional analysis of HB 203 [included in
the committee packet], which read as follows [original
punctuation provided]:
Section 1. This section amends AS 23.10.040(a) to
require employers to pay wages or other compensation
with lawful money of the United States or with
negotiable checks, drafts, or orders payable upon
presentation without discount by a bank or depository
inside the state.
Section 2. This section adds a new section to AS 23.10
to allow employers to pay wages by credit to a payroll
card account if the employee has voluntarily
authorized the credit or has not authorized deposit of
the employee's wages under AS 23.10.043. The section
also requires employers to notify employees of their
wage payment options, the payroll card terms and
conditions, and the fees associated with using a
payroll card account. Additionally, the section
requires payroll card accounts to provide employees
with at least one cost-free withdrawal each week or
pay period, and an unlimited cost-free mechanism to
check the payroll card account balance. Finally, the
section prohibits employers from offering payroll card
accounts that charge fees for certain activities and
requires that wages credited to payroll card accounts
be insured on a pass-through basis to the employee.
4:16:38 PM
CHAIR SUMNER said the committee would hear invited testimony
from Dan Lewis.
4:16:49 PM
DAN LEWIS, Vice President, Compliance Programs and Government
Affairs, ADP, gave testimony in support of HB 203. He said the
bill would benefit employers from a payroll management and
expense perspective, while also providing significant benefits
to employees. To be clear, he said, nothing in the bill would
prevent employees from continuing to receive pay from direct
deposit, and employers could offer paper paychecks. Further,
the bill would protect the right to collective bargaining
arrangements and would not impact regulation for payment of
wages to state employees. He explained that advances in
technology have improved how employees can be paid more timely,
consistently, and securely. He elaborated on the benefits of
electronic payment.
4:20:38 PM
REPRESENTATIVE SADDLER asked what ADP is and what the company
does.
MR. LEWIS said Automatic Data Processing (ADP) is a human
capital management company that specializes in payroll.
4:21:27 PM
REPRESENTATIVE FIELDS asked about the basic logistics of payroll
cards and whether the deposits are insured by the Federal
Deposit Insurance Company (FDIC).
MR. LEWIS said that the cards operate similar to any other debit
or Visa card and are independent from the employee's bank
account. The cards are directly funded with the full amount of
pay, which can then be transferred to a bank account or used to
pay off a credit card. He noted that the payroll cards can be
used anywhere that accepts debit or credit cards and there are
no transaction fees. He assured Representative Fields that the
cards are FDIC insured.
REPRESENTATIVE FIELDS questioned the percentage of employees
that use payroll cards versus direct deposit in other states.
MR. LEWIS said he did not have those statistics.
4:23:20 PM
REPRESENTATIVE SADDLER asked whether the payroll card would
allow employees to view how much of their pay has been withheld
for various purposes and other deductions.
MR. LEWIS said yes, employees can access an electronic portal
that provides access to the same information that's available on
a paper paycheck.
4:24:37 PM
CHAIR SUMNER announced that HB 203 would be held over.