Illinois Will Soon Allow Wage Payment by Payroll Debit Card
Author: Rena Pirsos, XpertHR Legal Editor
August 22, 2014
The Illinois wage payment law has been amended to include a new section that officially permits employers to pay wages to employees using payroll debit cards (in addition to cash, check or direct deposit) starting January 1, 2015. Although paycards are already permitted by an employer advisory issued by the Illinois Department of Labor, until now, the law has been silent on the issue.
An Illinois employer's payroll debit card program must meet several requirements before it can be offered to employees:
- Wage payment via payroll debit card may not be made a condition of employment or a condition for the receipt of any benefit or other form of payment for any employee.
- An employer cannot initiate this method of wage payment unless:
- Employees receive a written disclosure notifying them that payment by payroll card is voluntary, listing the other methods of payment offered and explaining the terms and conditions of the payroll card account option;
- Another method of payment is offered; and
- Employees consent voluntarily to receive wages by payroll card.
An employer's payroll card program also must provide an employee with:
- At least one method of withdrawing the full net wages from the payroll card once per pay period, and not less than twice per month, at no cost to the employee and at a convenient location;
- At an employee's request, one paper or electronic transaction history each month that includes all deposits, withdrawals, deductions or charges at no cost to the employee;
- Unlimited telephone access to obtain the payroll card account balance at any time without incurring a fee;
- A declined transaction option twice per month and at no cost to the employee; and
- Protection from unauthorized use of the payroll card as per state and federal law regarding electronic fund transfers.
An employer's payroll card program must not:
- Charge fees for point of sale transactions; the application, initiation, loading of wages by the employer; or participation in the payroll card program; and/or
- Be linked to any form of credit including, but not limited to, overdraft fees, a loan against future pay, or a cash advance on future pay or work not yet performed.
In addition, if an employee who receives wages by payroll card requests to be paid by another method already offered by the employer, the employer must begin paying the employee by the requested method within two pay periods of the employee's request.