SRC-LBB H.B. 3308 78(R)   BILL ANALYSIS


Senate Research Center   H.B. 3308
78R7685 KSD-DBy: Capelo (Hinojosa)
Business & Commerce
5/21/2003
Engrossed


DIGEST AND PURPOSE 

Direct deposit is a cost effective method of paying wages, allowing for a
savings of time and money for employers and employees.  Employers are able
to reduce personnel time associated with preparing and distributing
checks, and other costs, such as banking fees and postage, while employees
are guaranteed receipt of their wages if they are sick or out of town.
H.B. 3308 authorizes employers to elect to pay wages to employees who
maintain an account at a financial institution that accepts direct
deposit, solely through direct deposit. 

RULEMAKING AUTHORITY

This bill does not expressly 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)  Authorizes an employer to pay wages by certain methods.
  
(c)  Authorizes an employer to elect to pay wages to an employee who
maintains at a financial institution an account that qualifies for
electronic funds transfer through a direct deposit plan that uses
electronic funds transfer to deposit the wages in the employee's account.
Requires an employer who desires to pay wages through a direct deposit
plan to: 

(1)  notify each affected employee in writing, at least 60 days before the
date on which the direct deposit payroll system is scheduled to begin,
that the employer is adopting a direct deposit payroll system; and 

(2)  obtain from the employee any information required by the financial
institution in which the employee maintains the account that is necessary
to implement the electronic funds transfer. 

SECTION 2.  Effective date:  upon passage or September 1, 2003.