Eric. T. Schneiderman, New York’s top prosecutor, is backing a new bill in the state legislature aimed at regulating the use of so-called payroll cards, whose fees, critics say, can severely cut into the paychecks of low-wage workers. The new proposal would require employers to offer other payment options and consumer protections.
The new proposals come in response to growing concern from regulators and consumer advocates that workers who have no other way of collecting their pay are being unfairly targeted.
“The problem is a problem that’s been growing for some time,” Mr. Schneiderman said in an interview on Thursday.
While federal law prohibits employers from requiring that workers use a specific bank, more specific regulations around payroll cards vary state by state, and some states have little to no guidance at all.
“The goal of this legislation,” Mr. Schneiderman said, “is to move past the stage where we’re trying to chase down individual employers with laws that were not written with payroll laws in mind.”
Last summer, Mr. Schneiderman sent letters of inquiry to more than 40 companies, including Walmart, Walgreen and Home Depot. Lisa Madigan, the Illinois attorney general, backed a similar proposal to Mr. Schneiderman’s that was approved by the state legislature in May.
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