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 House lawmakers voted 98-11-1 today to send House Bill 5622 to the
governor. The bill, crafted by Attorney General Madigan’s office and
sponsored by Rep. Arthur Turner and Sen. Kwame Raoul, addresses this
increasingly popular form of payment used by employers of hourly,
low wage workers at fast food restaurants and stores. Instead of
issuing paper checks, employers are providing wages on payroll
cards. But employees are charged numerous fees to access or spend
their earned wages, such as: a $5 account inactivity fee, a $3 fee
for requesting a monthly statement of their account or 50 cent fees
every time they want to make a purchase or check their account
balance.
Last year, the Attorney General’s office began investigating the use
of payroll cards after receiving complaints from employees in
Illinois and discovered the unreasonable fees attached to the cards
and other practices that reduce the employees’ earnings. The
Attorney General’s office crafted the legislation, with the
assistance of the Illinois Department of Labor, to put a stop to
these harmful practices.
“People shouldn’t have to pay to get their pay,” Madigan said. “This
bill will ensure that low wage workers get all of their wages
instead of having them siphoned off by banks through unfair and
excessive fees.”
The bill will help ensure payroll cards benefit employees by
prohibiting fees for simply accessing their wages or checking an
account balance, while also providing employers with flexibility to
meet the proposed requirements. The bill will provide guidelines for
employers wishing to use this new form of wage payment.
“Ideally, every worker would be able to have a bank account and
build their savings each pay period,” Rep. Turner said.
“Unfortunately this is not the case for employees throughout the
state of Illinois. Allowing businesses to pay their employees
through electronic debit cards gives workers a secure, convenient
and no-cost alternative to a paycheck.”
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House Bill 5622 would:
-
Ensure employees can
access their wages without incurring fees, including a
prohibition on fees for overdrafts, transaction history requests
and purchases;
- Limit fees for card inactivity and
declined transactions;
- Preserve employees’ right to
choose the payment method that works for them, whether that
method is check, direct deposit or payroll card; and
- Require employers to give
employees notice of the terms of the payroll card program
“Workers compensated using payroll cards deserve a fair wage, fairly
paid – without having to put up with excessive fees and restrictions
just to access their paychecks,” said Sen. Raoul. “Employers and
employees should be able to use this increasingly popular form of
payment, as long as workers’ options and reasonable expectations of
fair treatment are respected.”
[Text received: THE OFFICE OF
ATTORNEY GENERAL LISA MADIGAN]
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