Employers dealing payroll cards.

Author:Morton, Heather
Position:TRENDS - Brief article
 
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Payroll cards have become a popular alternative to paper checks and direct deposits for paying wages. Lawmakers have tried to balance promoting their use with protecting employees from hidden and unclear fees. Payroll cards operate much like prepaid debit cards. They can be loaded with employees' wages and used in stores or online to buy goods or pay bills. Cards are often branded by American Express, Discover, MasterCard or Visa and can be used to get cash from ATMs, bank tellers or through convenience checks.

Proponents argue that payroll cards are safer and more convenient than getting paid in cash or by paper check. The cards are protected like traditional debit cards under the Federal Reserve Board's Regulation E. For employees who don't use financial institutions or who cash their paychecks, payroll cards eliminate check-cashing fees. Employees can also use monthly transaction records to track their spending, and if a card is lost or stolen, the transactions can be disputed and the funds replaced, if necessary.

Consumer advocates are concerned that...

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