Also known as a paycard account or payroll debit card account. An account directly or indirectly established through an employer to which electronic fund transfers of an employee's wages, salary, or other compensation, including commissions, are made on a recurring basis. Payroll card accounts may be operated or managed by the employer, a third-party payroll processor, a depository institution, or any other person.

Employees access their wages using payroll cards, which operate like typical debit cards. Payroll cards are not linked to a checking account and are not intended to be a savings vehicle. Employees typically cannot make personal deposits into payroll card accounts and do not earn interest on the funds.

The federal Fair Labor Standards Act (FLSA) is silent about wage payment methods, including payroll cards. However, the consumer protections of the federal Electronic Fund Transfer Act (EFTA) and Regulation E, which implements the EFTA, apply to prepaid accounts, including payroll card accounts. The EFTA imposes significant disclosure requirements and other obligations on the financial institutions where payroll card accounts are established, including:

For more information on EFTA payroll card account requirements, see Practice Note, Paying Employee Wages with Payroll Cards: The Electronic Fund Transfer Act.

Different or additional requirements may apply under state or local law. For example, many states have payroll card disclosure and employee consent requirements and limit associated fees. For more information on state law requirements, see State Direct Deposit and Payroll Card Laws Chart: Overview.

For more information on payroll cards, see Practice Note, Paying Employee Wages with Payroll Cards.