Ann Flood Rep. Ann Flood, R-Northampton, speaks during a news conference recently.

Pennsylvania businesses may be able to end the use of paper paychecks under legislation proposed in the state Legislature.

Rep. Ann Flood, R-Northampton, has introduced House Bill 1762, which would give businesses the option of offering pay exclusively electronically. Current state law allows businesses to use direct deposit or a payroll card, but employees can request a paper check and the employer is required to provide it.

“Technology advancements have improved and expanded wage payments, making paper checks archaic and much less beneficial for workers than electronic alternatives,” Flood wrote in here legislative memorandum. “Currently 93% of American workers are paid via direct deposit and less than 5% continue to receive paper checks. Paper checks are costly and difficult to transact and have no consumer protections.”

Flood said 25 states — including Massachusetts, Washington, Texas and Alabama — allow checks to be paid exclusively electronically while many state government benefits are also paid electronically.

The legislation does not change existing consumer protections in state law for those receiving their pay electronically, including:

¯ Prohibiting on fees for issuing the payroll card or for deposit of wages on the card;

¯ Allowing at least one free replacement card per year for each employee;

¯ Allowing at least one fee-free withdraw up to the full amount the employees net wages per pay period;

¯ Requiring a free method to check the payroll card account balance;

¯ Prohibiting point-of-sale transaction fees;

¯ Prohibiting funds on the payroll card from expiring; and

¯ Prohibiting inactivity fees for any period of inactivity of less than one-year.

“This legislation would help ensure that Pennsylvania employers can pay their employees timely during emergencies, such as fires, floods, snowstorms, or travel restrictions associated with the COVID-19 pandemic,” Flood wrote. “These and other circumstances frequently make physical delivery of checks and traveling to a bank or check-casher to deposit or cash checks unsafe and, in some cases, impossible.”