BILL ANALYSIS


                                                     C.S.S.B. 325
                                                    By: Patterson
                                             Economic Development
                                                         04-12-95
                                   Committee Report (Substituted)
BACKGROUND

Currently, Texas labor law allows private businesses to pay wages
by electronic transfer of funds directly to an employee's bank
account with the consent of the employee. The issue of employee
consent frequently causes a business to establish a dual payroll
system, both manual and electronic.

PURPOSE

As proposed, C.S.S.B. 325 authorizes an employer, if an employee
maintains an account that qualifies for electronic funds transfer
at a financial institution, to pay wages to that employee through
electronic transfer to the employee's account.

RULEMAKING AUTHORITY

It is the committee's opinion that this bill does not grant any
additional rulemaking authority to a state officer, institution, or
agency.

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Section 61.017, Labor Code, as follows:

     Sec. 61.017. DELIVERY OF PAYMENT. (a) Requires an employer to
     pay wages through a means authorized by this section.
     
     (b) Sets forth provisions by which an employer is authorized
       to pay wages.
       
       (c)(1) Authorizes an employer, if an employee maintains an
       account that qualifies for electronic funds transfer at a
       financial institution, to pay wages to that employee through
       the electronic transfer of the wages to the employee's
       account. Authorizes an employee to elect to have a portion
       of the wages paid by electronic funds transfer to an account
       at one financial institution and the remainder of the wages
       paid by electronic funds transfer to an account at a
       different institution.
       
       (2) Requires the employee to choose which financial
         institution will receive the wages and in no event may the
         employer require the employee to establish an account at
         a specific financial institution.
         
         (3) Prohibits the payment of wages by electronic funds
         transfer from involving greater cost to the employee than
         the payment of wages by paper check or warrant.
         
         (4) Prohibits an employer, if an employee does not
         maintain an account that qualifies for electronic funds
         transfer, from requiring the employee to establish such an
         account.
         
         (5) Sets forth requirements for an employer that desires
         to pay wages through electronic transfer.
       SECTION 2.    Emergency clause.
      Effective date: 90 days after adjournment.