Payment of wages by negotiable instrument; rights of holder in due course in event of nonpayment; penalty.
1. A person engaged in any business or enterprise of any kind in this State shall not issue, in payment of, or as evidence of, any indebtedness for wages due an employee, any order, check, memorandum or other acknowledgment of indebtedness unless it is a negotiable instrument payable without discount, in cash on demand, at some bank, credit union or other established place of business but this subsection does not limit or interfere with the right of any employee, by agreement, to accept from any such person, as an evidence or acknowledgment of indebtedness for wages due him, a negotiable instrument payable at some future date with interest.
2. In the event of nonpayment when due of any negotiable instrument issued in payment of wages, the holder in due course of the instrument succeeds and has the same rights, priorities and preferences with respect to payment thereof, and stands in the same position, as the payee of the instrument with respect to a claim for wages unpaid when due, in addition to any other remedy available to the holder in due course provided by law.
3. An employer who knowingly issues to an employee a negotiable instrument in payment of wages for which there is insufficient money, property or credit with the drawee of the instrument to pay it in full upon presentation shall reimburse the employee for any penalty or charge incurred by him arising from his reliance on the validity of the instrument.
Last modified: February 25, 2006