APA’s Government Relations Task Force State and Local Topics Subcommittee in June supported Pennsylvania H.B. 1762 on the use of electronic funds transfer systems. The bill would allow employers to mandate that employees select some form of electronic wage payments. While employers cannot mandate a particular electronic pay method, they can eliminate paper checks.
APA’s Position
APA’s position is that electronic wage payments through direct deposit or payroll card are an efficient, reliable, and cost-saving decision for employers, as well as a vast improvement over paper checks in terms of consumer protections and convenience. With mandatory electronic payments, employees can still choose between direct deposit or payroll cards. Employers could continue to offer paper checks if they prefer.
Today, most states already allow employers to offer electronic wage payment options and virtually all government payments are electronic (e.g., tax refunds, unemployment, social security, nutrition assistance, disability). Paper checks also can interfere with workers’ financial security since checks do not allow for easy and timely access to funds.
In addition, electronic wage payments open the door to earlier availability of earned pay. Earned wage access services offered by employers allow employees to access earned wages before scheduled paydays, but the benefits are only available to employees who are paid electronically.
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Alice P. Jacobsohn, Esq., is Director of Government Relations for the APA.
