The Illinois Wage Payment and Collection Act was amended to regulate the use of payroll cards.
A “payroll card” is a card provided to an employee by an employer or other payroll card issuer as a means of accessing the employee’s payroll card account.
A “payroll card account” is an account that is directly or indirectly established through an employer and to which deposits of a participating employee’s wages are made.
An employer using a payroll card to pay an employee’s wages must meet the following requirements:
- The employer cannot make receipt of wages by payroll card a condition of employment for any employee.
- The employer cannot initiate payment of wages to the employee by electronic fund transfer to a payroll card account unless the employer provides the employee with a clear and conspicuous written disclosure explaining the terms and conditions of the payroll card account option, including a list of all fees that may be deducted from the employee’s payroll card account by the employer or payroll card issuer; and a notice that third parties may assess transaction fees in addition to the fees assessed by the employee’s payroll card issuer.
- The employer must offer the employee other methods of payment and must obtain the employee’s voluntary consent to receive the wages by payroll card.
- A payroll card program offered by the employer must provide the employee with at least one method of withdrawing the employee’s full net wages from the payroll card every 2 weeks, at no cost to the employee, at a location readily available to the employee.
- At the employee’s request, he or she must be given a transaction history, in paper or electronic form, each month that includes all deposits, withdrawals, deductions, or charges from the employee’s payroll card account at no cost.
- The employer must allow the employee to obtain the account balance at any time without incurring a fee online, by telephone, by text message, or at an ATM location.
An employer may not use a payroll card program that includes fees for declined transactions, point of sale transactions, or the application, initiation, loading of wages by the employer, or participation in the payroll card program. Fees for account inactivity may be assessed following one year of inactivity.
The payroll card or payroll card account may not be linked to any form of credit including, but not limited to, overdraft fees or overdraft service fees, a loan against future pay, or a cash advance on future pay or work not yet performed.
If the employee requests to be paid by other methods of payment the employer must, within two pay periods, begin payment to the employee by an allowable method requested by the employee.
Finally, a payroll card program must provide protections from unauthorized use of the payroll card in accordance with State and federal law concerning electronic fund transfers.
The Act takes effect January 1, 2015.
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