BILL ANALYSIS
C.S.H.B. 2885
By: Davis
May 2, 1995
Committee Report (Substituted)
BACKGROUND
More than one-third of U.S. workers now receive pay by direct
deposit and participation has tripled since 1989. Complete 100
percent participation is unlikely with a voluntary system,
regardless of marketing the program or offering positive
incentives. Currently, voluntary participation rates vary
significantly, so employers must develop incentives to encourage
voluntary participation. Legislation is needed to allow employers
to develop such incentives.
PURPOSE
The purpose is to allow an employer to make payment of wages
through electronic transfer.
RULEMAKING AUTHORITY
It is the committee's opinion that this bill does not expressly
grant any additional rulemaking authority to a state officer,
department, agency, or institution.
SECTION BY SECTION ANALYSIS
SECTION 1. Amends Section 61.017, Labor Code, (a) Allows an
employer to pay wages through a means authorized by this section.
(b) An employer may pay waged by:
(1) delivering them to the employee during regular
employment hours;
(2) delivering them to the employee at a time and place
agreed upon;
(3) sending them to the employee by registered mail,
received no later than payday;
(4) delivering them to a person designated by the
employee in writing;
(5) delivering them to the employee by any reasonable
means authorized by the employee in writing;
(6) delivering them through the electronic transfer of
funds to a financial institution account or accounts
designated by the employee, or by providing the employee
with a means by which the employee may withdraw his or
her wages on payday, or thereafter at the employee's
discretion, from a financial institutions, a cash
machine or an automated teller machine, provided that:
(a) employee has access to a statement of the
employee's earnings;
(b) an employer does not compel an employee to open
an account at a financial institution or terminate
employment for not having an account at a financial
institution;
(c) currently has a voluntary electronic funds
transfer program with 51 percent or more
participation and a payroll of 5,000 employees or
more;
(d) when paid through cash machine or automated
teller, the employee is entitled one withdrawal
free of service charge;
(e) written notice is given to employee that the
employer is adopting an electronic funds transfer
payroll system; and
(f) employee shall designate the account or
accounts which the wages are to be delivered and
provide the information to the employer.
(g) this subsection does not apply to the
electronic transfer of wages pursuant to the
provisions of subsections (1), (2), (4) or (5)
above.
SECTION 2. Emergency clause.
COMPARISON OF ORIGINAL TO SUBSTITUTE
The original bill allowed an employer to pay wages to an employee
through the electronic funds transfer of wages to that employee's
account provided that the employee has access to a credit union or
banking facility; the employer currently has a voluntary electronic
funds transfer program with a participation rate of 51 percent or
more; the employer has a domestic or international payroll of 5,000
employees or more; and the employer provides the employee with
access to a statement of the employee's earnings at least one day
prior to the employees pay day. The original bill also allowed an
employee that desires to pay wages through electronic funds
transfer pursuant to the foregoing provision shall notify each
affected employee that the employer is adopting a direct-deposit
payroll system; and obtain from the employee any information
required in order to make the transfer by the financial
institutions in which the employee maintains the accounts. The
substitute allows an employer to pay wages by delivering them, not
later than pay day, through the electronic transfer of funds to a
financial institution account or accounts designated by the
employee, or by providing the employee with a means by which the
employee may withdraw his or her wages on pay day or thereafter
from a financial institution, a cash machine or an automated teller
machine; specifications for an employee access to a statement of
the employee's earnings; employee not having an account at a
financial institution; a voluntary electronic funds transfer
program; delivery through a cash machine; written notice to each
employee; designation of accounts or account which the wages are
delivered; and provisions for the subdivision not to apply to
subsections (1), (2), (4) or (5).
SUMMARY OF COMMITTEE ACTION
H.B. 2885 was considered by the committee in a public hearing on
March 27, 1995. H.B. 2885 was left pending in committee. H.B.
2885 was reconsidered by the committee in a public hearing on April
24, 1995. The committee considered a complete for H.B. 2885.
Testifying in favor of the bill was Bud Chenault, representing
Texas Instruments Inc.; Mary Miksa, representing herself and the
Texas Association of Business and Chambers of Commerce; and Jesse
Oliver, representing Texas Instruments Inc. H.B. 2885 was left
pending in committee. H.B. 2885 was reconsidered by the committee
in a formal meeting on April 27, 1995. The committee considered a
second complete substitute for H.B. 2885. The second substitute
was adopted without objection. H.B. 2885 was reported favorably as
substituted, with the recommendations that it do pass and be
printed, by a record vote of 7 ayes, 0 nays, 0 pnv, 2 absent.