Q & A – Can we use debit cards to pay our employees in California?

Q: Can we use debit cards to pay our employees in California?

A: Here is a summary of what the Labor Commissioner explained that under Labor Code Section 212, payroll debit card programs must have the following features:

• The employee must voluntarily enter into the program as an alternative to receiving a traditional paycheck or a direct deposit into the employee’s personal account.
• The employee must be informed regarding all aspects of the program.
• The employee must be able to use the cards at numerous locations within the state.
• The employee must have full access to his or her wages on payday. This requirement is met if the employee receives at least one free transaction per pay period.
• The employer must issue a separate itemized wage statement for each pay period as required by California Labor Code Section 226.

http://www.dir.ca.gov/dlse/opinions/2008-07-07.pdf