California’s Department of Labor Standards Enforcement (DLSE) has released two opinion letters (OpLtrs) that should please employers by sanctioning their use of alternate, electronic wage payment methods. The OpLtrs approve the use of payroll debit cards and “Money Network checks” for the payment of wages under the California Labor Code, provided that:

  • The programs make the full amount of wages available to employees on their regularly scheduled payday without penalty or reduction;
  • Employees’ participation in the program is voluntary; and
  • The programs provide a sufficiently extensive network of ATMs and other locations at which employees may access their accounts.

The DLSE addressed the use of two types of payroll services: payroll debit cards and a nationwide check cashing service. The programs are voluntary and employees may elect, at any time, to receive their wages by direct deposit into an account at their own bank or credit union.

Before implementing either type of program, employers should work with their legal counsel and make sure they meet all the requirements outlined by the DLSE.