Gino DiCaro

Paycards legislation vetoed

By Gino DiCaro, VP, Communications

Capitol Update, Oct. 21, 2011

Siding with banks and employers, Governor Jerry Brown vetoed SB 931 (Noreen Evans, D-Santa Rosa), a bill unions sought to restrict employers from using debit cards to pay employees.

The practice of paying workers with debit cards carrying their wages that can be withdrawn at stores, banks and ATMs, has become more popular as employers try to cut costs. The payroll cards are cheaper to process than paper checks and, unlike direct deposit, can be issued to low-wage workers who don't have bank accounts.

SB 931 would have limited the fees issuers could charge when workers access their wages. Banks said the fees would have resulted in a de-facto ban on the cards. Despite the veto, the Governor left the door open for the issue to be revisited, explaining that while he believed the bill went too far, there was a need for reasonable protections of workers and that he would work to help find a solution agreeable to all stakeholders.

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