Are payroll service providers money transmitters?

Most industry professionals regard these statutes as anti-money laundering and consumer protection laws; however, many states still require payroll processors, who transact on behalf of businesses, to license as money transmitters.

Is payroll processing money transmission?

A small number of states, including California and Washington, provide statutory exemptions from money transmission licensing and regulation for companies that engage in payroll processing activities (including the receipt and transmission of wages), provided certain criteria are met.

What is a money transmission service?

The term “money transmission services” means the acceptance of currency, funds, or other value that substitutes for currency from one person and the transmission of currency, funds, or other value that substitutes for currency to another location or person by any means.

Why do companies outsource payroll services?

Payroll outsourcing is a process in which businesses hire an external firm to manage all payroll functions to help them save time, money, and effort. Frees up both time and resources allowing businesses to focus more on core tasks. It reduces costs and risks involved.

What is the law on payroll?

Payroll: What you need to know The Fair Labor Standards Act (FLSA), also known as the Wage and Hour Law, regulates minimum wage, overtime, equal pay, recordkeeping, and child labor for employees of enterprises engaged in interstate or foreign commerce and employees of state and local governments.

What is considered a money service business?

The term “money services business” includes any person doing business, whether or not on a regular basis or as an organized business concern, in one or more of the following capacities: (1) Currency dealer or exchanger. (2) Check casher. (3) Issuer of traveler’s checks, money orders or stored value.