Paycards are convenient and cost-effective, but compliance concerns often prevent employers from reaping these benefits. Banking regulations and wage and hour laws at the federal and state levels all present obstacles. Once you understand these laws, however, you may see that paycard risks are worth the reward.
The paycard regulatory landscape
When you consider the overlapping banking, federal and state requirements, paycard compliance can be complex. Some of the regulations you have to contend with include:
- Federal Deposit Insurance Company (FDIC) eligibility
- Fair Labor Standards Act (FLSA)
- Electronic Funds Transfer Act (EFTA) and Regulation E
- Consumer Financial Protection Bureau (CFPB) Prepaid Rule
- State fee prohibitions
How ADP can help with paycard compliance
Experienced paycard service providers like ADP can help you navigate compliance complexities and offer your employees the flexible pay methods they want, while mitigating risk. Our Wisely™ PayCard provides a modern solution for going paperless that is:
- Enabled to be compliant in all 50-states
- Easy for employees to sign up for
- Compatible with existing payroll systems
- Designed to save time and money
For more information about the opportunities presented by paycards and how to address compliance challenges, download ADP’s guide, Employer Paycards: Staying on the Right Side of Compliance.