ATM/draft-based payroll delivery service for over-the-road truck drivers satisfies Labor Code 212

STATE OF CALIFORNIA PETE WILSON, Governor
DEPARTMENT OF INDUSTRIAL RELATIONS
DIVISION OF LABOR STANDARDS ENFORCEMENT
LEGAL SECTION
45 Fremont Street, Suite 3220
San Francisco, CA 94105
(415) 975-2060

H. THOMAS CADELL, JR., Chief Counsel

October 21, 1997

Donald H. Maffly
Chandler, Wood, Harrington & Maffly
111 Sutter Street, Suite 1900
San Francisco, CA 94104

Re: Payroll Service Program For Truck Drivers

Dear Mr. Maffly:

This letter is in response to your latest letter, dated August
29, 1997, regarding your client's proposed program to provide a
payroll service for over-the-road truck drivers.

As you explained, the payroll delivery service is offered to
companies that employ truck drivers who are often on the road in
California and other states and have a need to receive a portion of
their wages in a convenient manner while they are on the road and
also have a need to have all or a portion of wages made available
to the driver's spouse to provide for the household and to pay
monthly bills. Obviously, truck drivers engaged in over-the-road
transportation have unique needs and in order to meet these needs
the Division has agreed to review your client's payroll delivery
service as that system applies to these drivers.

As you will remember, my concern in the past discussions we
have had on this subject is that Labor Code § 219 clearly provides
that "no provision of this article can in any way be contravened or
set aside by a private agreement, whether written, oral, or
implied." Based on this clear statutory language, I felt that I
had to reassess my statement to you that so long as one of the
methods were permissible, the employer could contract with the
employee to, in effect, waive the provisions of Labor Code § 212.

However, in response to my concerns, you have made it clear
that your client's proposal allows all or any portion of wages
earned by the driver to be transferred by direct deposit to the

Donald H. Maffly
October 21, 1997
Page 2

driver's bank account and also allows all or any portion of those
wages to be distributed to the driver while on the road both
through ATM machines (which have limited amounts which can be
recovered in any one day) and through drafts which may be presented
to service centers under contractual arrangement with your client.
You have assured me that there is no charge incurred by the
employee for the use of the draft process. These drafts, of
course, could be in payment of all sums held in the employee's wage
account1 and may be negotiated at a bank in the State of California
with which your client maintains an account. The employee is,
thus, guaranteed instant cash on demand at any time for the full
amount of wages loaded into his or her settlement account.

The employee may, of course, also choose to have all or any
portion of his wages deposited directly to his own bank account.

This letter assumes that your client's payroll practice meets
any requirements imposed by applicable statutes or regulations of
the State of California dealing with banking and trusts.

Based upon the above, it is the opinion of this office that
your client's payroll delivery service as described in your letter
and in this letter, meet the requirements of Labor Code § 212 (a)
for use in the unique circumstances found in the over-the-road
trucking industry.

Yours truly,

H. THOMAS CADELL, JR.
Chief Counsel

c.c. Jose Millan, State Labor Commissioner
Nance Steffen, Assistant Labor Commissioner
Greg Rupp, Assistant Labor Commissioner
Tom Grogan, Assistant Labor Commissioner

1 as you explained, the amount of cash available at any service center might
limit the amount that the employee would be able to withdraw; but the "draft"
could be deposited by the worker in his own bank account.