New wage regulations allow payroll debit cards

Alana Roberts

Wednesday, July 28, 2004 | 10:50 a.m.

Topping the Nevada labor commissioner's list of newly released wage and hour regulations is a regulation allowing companies to use payroll debit cards to pay employees in lieu of paper checks or direct deposit.

Nevada Labor Commissioner Terry Johnson announced Tuesday that he has adopted the new regulations, which take effect Aug. 25. The regulations are the first issued regulations that clarify the state's labor laws, some of which haven't been updated since the early 1900s.

The new technology is being pushed by the American Payroll Association and various payroll companies that say it will save companies and employees money when it comes to issuing and cashing checks. The payroll debit cards will act like regular debit or ATM cards.

Johnson said the regulation will allow employees whose companies issue wages through the card the ability to opt out and have their wages issued through traditional paper check or direct deposit form. The payroll debit card has fees attached when an employee tries to withdraw funds, however there are no fees if the employee opts to withdraw all of the money on the card in one shot, according to the regulations. Johnson said his office received many phone calls from companies asking about the new technology.

Johnson said the new technology will allow workers without banking accounts to establish credit.

"The payroll debit cards gives them an opportunity to take their ATM debit card to use it wherever ATMs are accepted," Johnson said.

Gary Thompson, a Harrah's Entertainment Inc. spokesman, said the company is considering the technology.

"We don't think we'll make a decision for several months. It is our understanding that there are a number of (Nevada) employers that are looking at this development," Thompson said.

Other regulations Johnson has adopted will help clarify existing labor laws on such topics as what constitutes an illegal deduction from an employee's wages and the definition of an independent contractor.