Bill Text: IA SF2350 | 2013-2014 | 85th General Assembly | Introduced

Iowa Senate Bill 2350 (Prior Session Legislation)

Introduced

Bill Title: A bill for an act relating to payment of wages. (Formerly SSB 3214.)

Spectrum: Committee Bill

Status: (Engrossed - Dead) 2014-04-24 - Subcommittee, Windschitl, Isenhart, and Sands. H.J. 800. [SF2350 Detail]

Download: Iowa-2013-SF2350-Introduced.html

Senate File 2350 - Introduced SENATE FILE 2350 BY COMMITTEE ON WAYS AND MEANS (SUCCESSOR TO SSB 3214) A BILL FOR An Act relating to payment of wages. 1 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 2 TLSB 6191SV (3) 85 je/rj

S.F. 2350 Section 1. Section 91A.3, subsection 3, Code 2014, is 1 amended to read as follows: 2 3. a. The wages paid under subsection 1 shall be paid using 3 a method authorized by this section. 4 b. Wages due may be paid at the employee’s normal place of 5 employment during normal employment hours or at a place and 6 hour mutually agreed upon by the employer and employee , or the 7 employee may elect to have the wages sent for direct deposit, 8 on or by the regular payday of the employee, into a financial 9 institution designated by the employee . 10 c. Upon written request by the employee, wages due may be 11 sent to the employee by mail. The employer shall maintain a 12 copy of the request for as long as it is effective and for at 13 least two years thereafter. 14 d. The employee may elect to have wages due sent for 15 direct deposit, on or by the regular payday of the employee, 16 into a financial institution designated by the employee. An 17 employee hired on or after July 1, 2005, may be required, as 18 a condition of employment, to participate in direct deposit 19 of the employee’s wages in a financial institution of the 20 employee’s choice unless any of the following conditions exist: 21 (1) The costs to the employee of establishing and 22 maintaining an account for purposes of the direct deposit would 23 effectively reduce the employee’s wages to a level below the 24 minimum wage provided under section 91D.1 . 25 (2) The employee would incur fees charged to the employee’s 26 account as a result of the direct deposit. 27 (3) The provisions of a collective bargaining agreement 28 mutually agreed upon by the employer and the employee 29 organization prohibit the employer from requiring an employee 30 to sign up for direct deposit as a condition of hire. 31 e. (1) If the employer offers to pay wages by debit card or 32 pay card, the employee may elect to have wages due so paid if 33 all of the following conditions are met: 34 (a) The employee is provided written notice of all possible 35 -1- LSB 6191SV (3) 85 je/rj 1/ 4

S.F. 2350 charges for use of the debit card or pay card when payment 1 by debit card or pay card is offered to the employee, and 2 in advance of any change in the amount or frequency of such 3 charges. 4 (b) The employee voluntarily agrees in writing to payment by 5 debit card or pay card. 6 (c) The employee has the option of withdrawing all wages due 7 once per pay period without incurring any charge for use of the 8 debit card or pay card. 9 (2) The employer shall retain copies of the employee’s 10 written consent and the notice of charges for the period for 11 which the consent is effective and for at least two years 12 thereafter. 13 (3) The employer shall substitute another payment method 14 in accordance with this section no later than two pay periods 15 after receiving a request for termination of payment by debit 16 card or pay card from an employee. 17 b. f. If the employer fails to pay an employee’s wages on 18 or by the regular payday in accordance with this subsection , 19 the employer is liable for the amount of any overdraft charge 20 if the overdraft is created on the employee’s account because 21 of the employer’s failure to pay the wages on or by the regular 22 payday. The overdraft charges may be the basis for a claim 23 under section 91A.10 and for damages under section 91A.8 . 24 Sec. 2. Section 556.9, subsection 1, Code 2014, is amended 25 to read as follows: 26 1. All intangible personal property, not otherwise covered 27 by this chapter , including any income or increment earned on 28 the property and deducting any lawful charges, that is held 29 or owing in this state in the ordinary course of the holder’s 30 business and has remained unclaimed by the owner for more 31 than three years after it became payable or distributable 32 is presumed abandoned. However, unpaid wages, regardless 33 of the medium of payment in which they are paid, including 34 wages represented by payroll checks or other compensation for 35 -2- LSB 6191SV (3) 85 je/rj 2/ 4

S.F. 2350 personal services owing in the ordinary course of the holder’s 1 business , that remain unclaimed by the owner for more than 2 one year after becoming payable are presumed abandoned. For 3 purposes of this chapter, the employer of an employee to whom 4 unpaid wages are due shall be considered the holder of such 5 wages, regardless of whether the employer has engaged a service 6 provider to perform payroll services. 7 EXPLANATION 8 The inclusion of this explanation does not constitute agreement with 9 the explanation’s substance by the members of the general assembly. 10 This bill permits employees to elect to have wages due 11 paid by debit card or pay card under Code chapter 91A, the 12 Iowa wage payment collection law, if an employer offers to do 13 so and if certain conditions are met. The employee must be 14 provided written notice of all possible charges for use of the 15 debit card or pay card when payment by debit card or pay card 16 is offered to the employee, and in advance of any change in 17 the amount or frequency of such charges. The employee must 18 voluntarily agree in writing to payment by debit card or pay 19 card. The employee must have the option of withdrawing all 20 wages due once per pay period without incurring any charge for 21 use of the debit card or pay card. 22 The bill requires an employer to retain copies of the 23 employee’s written consent and the notice of charges for the 24 period for which the consent is effective and for at least two 25 years thereafter. The bill requires an employer to substitute 26 another payment method no later than two pay periods after 27 receiving a request for termination of payment by debit card 28 or pay card from an employee. 29 Under current Code chapter 556, relating to disposition 30 of unclaimed property, unpaid wages that remain unclaimed by 31 the owner for more than one year after becoming payable are 32 presumed abandoned. A holder of property presumed abandoned 33 is responsible for reporting such property to the treasurer 34 of state and for complying with other requirements under 35 -3- LSB 6191SV (3) 85 je/rj 3/ 4

S.F. 2350 Code chapter 556. The bill provides that this presumption 1 applies regardless of the medium of payment in which the wages 2 are paid. The bill also provides that, for the purposes of 3 Code chapter 556, the employer of an employee to whom unpaid 4 wages are due shall be considered the holder of such wages, 5 regardless of whether the employer has engaged a service 6 provider to perform payroll services. 7 -4- LSB 6191SV (3) 85 je/rj 4/ 4