Payment Of Wages; Payroll Card Account
SB 79 would regulate two separate areas of payment and wage practices in Alaska. First, it limits payment card networks from charging interchange fees on the tax or gratuity portion of an electronic card transaction when the merchant provides documentation showing the tax or tip amount. Merchants would be allowed to submit that documentation later if it was not provided at the time of authorization, and card networks would have to refund the fee on the tax or gratuity portion within 30 days. The bill also restricts how transaction data may be used or shared by entities involved in processing card payments, and it exempts smaller issuers below a $20 billion asset threshold.
Second, the bill creates a new framework for paying wages through payroll card accounts. Employers could use payroll cards only if the employee voluntarily authorizes the method or has not otherwise designated a different deposit method. The bill requires employers to disclose payroll card terms and fees, provide cost-free access to wages and account balances, and prohibits a range of fees, including fees for account participation, initial card issuance, wage transfers, and point-of-sale purchases. It also requires that payroll card balances be insured on a pass-through basis by FDIC, NCUA, or another deposit insurer.
The bill would amend Alaska wage-payment law in AS 23.10 to expressly allow payroll card accounts under specified consumer-protection conditions, and it would amend the Alaska Unfair Trade Practices and Consumer Protection Act to treat violations of the transaction-data restriction as an unfair trade practice. It also creates a new section in AS 06.90 governing interchange fees on tax and gratuity amounts, with civil penalties of $1,000 per violating transaction.
The general sentiment reflected in the available record appears favorable, or at least noncontroversial, since the Senate passed the bill on third reading by a unanimous 19-0 vote. No committee transcript excerpts were provided, so there is no recorded debate in the supplied materials. The absence of dissent in the vote suggests broad support for the bill’s consumer and worker protections.
The main points of potential contention, based on the bill text itself, are the cost and compliance burdens placed on payment card networks, issuers, processors, and employers. Card industry participants may object to the interchange-fee restrictions, the documentation/refund requirements, the data-use limits, and the $1,000-per-transaction penalty. Employers and payroll card providers may also view the payroll-card rules as restrictive because they limit fees, require disclosures, and mandate insured access to wages. The small-issuer exemption suggests the bill tries to reduce burden on smaller financial institutions while targeting larger networks and issuers.
SB 79 would add new statutory protections in Alaska’s financial-services and labor laws. It creates AS 06.90.020 to bar interchange fees on the tax and gratuity portion of card transactions when properly documented, and it adds AS 23.10.044 to regulate payroll card wage payments, including employee consent, fee limits, access requirements, and deposit insurance standards. It also amends the Alaska Unfair Trade Practices and Consumer Protection Act to make certain violations of the transaction-data restriction an unfair trade practice, exposing violators to enforcement under consumer-protection law and to a specific civil penalty for interchange-fee violations.
The available voting history indicates strong support for the bill: the Senate passed SB 79 on third reading 19-0. No committee discussion excerpts were provided, so there is no direct record of objections or amendments in the supplied materials. Overall, the bill appears to have been viewed positively as a consumer- and worker-protection measure, particularly because it addresses card-payment fees and payroll-card access to wages.
The likely areas of contention are with payment card networks, issuers, processors, and employers. Card industry stakeholders may object to the prohibition on charging interchange fees on taxes and tips, the requirement to refund those fees, the restriction on using transaction data, and the per-transaction civil penalty. Employers and payroll-card providers may be concerned about the operational requirements for payroll cards, including mandatory disclosures, fee prohibitions, free withdrawal and balance-check access, and the requirement that funds be insured on a pass-through basis. The bill’s small-issuer exemption suggests lawmakers anticipated that compliance burdens could be heavier for larger financial institutions than for smaller ones.