What happened?

On March 21, 2024, Governor Evers signed Assembly Bill 574 into law, requiring licensing and other substantive requirements on EWA providers.

Quick Summary:

• Wisconsin’s Earned Wage Access (EWA) law regulates services that allow employees to access their earned wages before payday.

• It requires EWA providers to be licensed, ensures consumer protection, and mandates at least one free access option for employees.

• Providers of EWA services required to be licensed under the new law are exempt from the state’s consumer loan and payday loan licensing laws.

What are the details?

• EWA service providers are businesses that allow consumers to access their earned but unpaid wages.

• They can charge fees for delivery or expedited delivery, subscription, or membership fees for a group of services, including EWA, and request voluntary tips.

• Providers must maintain Nationwide Multistate Licensing System and Registry (NMLS) licenses.

• The new Earned Wage Access (EWA) law in Wisconsin includes several important provisions in addition to licensing requirements as follows:
  • Free Access Option: EWA providers must offer at least one reasonable option for consumers to access their earned wages at no cost and clearly explain how to select this option.
  • Fee and Tip Disclosures: Providers must fully disclose all fees and inform consumers of their rights under the agreement. Tipping is allowed but must be clearly stated as voluntary. Providers cannot mislead consumers about tips or suggest that tips benefit specific individuals.
  • No Fee or Tip Sharing with Employers: Providers are prohibited from sharing any consumer fees or tips with their employers.
  • Credit and Fee Restrictions: Providers cannot use credit reports to determine eligibility, charge late fees, deferral fees, interest, or other penalties, and cannot accept payments via credit or charge cards.
  • Debt Reporting and Collection Limits: Providers cannot report nonpayment to credit agencies or debt collectors, nor can they attempt to collect debts through third parties or legal action.
  • Compliance with Other Laws: Providers must adhere to all relevant local, state, and federal privacy and information security laws, including the Electronic Fund Transfer Act, when seeking payments from consumer accounts.
  • Delivery Methods and Overdraft Fees: Providers can deliver proceeds by any mutually agreed method and must reimburse consumers for overdraft or insufficient funds fees caused by the provider.

Business Considerations

• Employers should ensure compliance and verify that any EWA providers they partner with are licensed and compliant with Wisconsin’s new EWA regulations, including maintaining their licenses on the Nationwide Multistate Licensing System and Registry (NMLS).

• Employers should ensure that EWA providers fully disclose all fees and inform employees about their rights under the agreement, including the voluntary nature of any tips.

• Employers should avoid fee/tip sharing.

Source References

• Assembly Bill 574

Resources

• WI DFI Earned Wage Access Services Provider
• WI DFI FAQs

This communication is intended solely for the purpose of conveying information. The present post might incorporate hyperlinks directing readers to websites managed by third-party entities. The inclusion of any links within this communication is meant to serve as points of reference and could encompass opinion articles from various law firms, articles from HR associations, official websites, news releases, and documents of government agencies, and other relevant third-party sources. Vensure has no authority over these external websites and bears no responsibility for their content. Furthermore, Vensure does not endorse the materials present on these websites. The contents of this communication should not be interpreted as legal advice or as a legal standpoint concerning specific facts or scenarios. Nor should it be deemed an exhaustive compilation of facts potentially pertinent to federal, state, or local laws. It is strongly advised that employers solicit legal guidance from an employment attorney when undertaking actions in response to any legal updates provided. This is due to the possibility of future alterations occurring in federal, state, and local laws, regulations, as well as the directives and guidelines issued by governing agencies. These changes may transpire at any given time, potentially rendering certain portions of the content within this update void or inaccurate.