Attorney General Madigan: House Approves
Legislation To Protect Low-wage Workers
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[April 16, 2014]
SPRINGFIELD — Attorney General
Lisa Madigan praised House lawmakers for passing legislation that puts
in place protections for low-wage workers who receive their wages on a
payroll card, an increasingly common method of payment used by Illinois
employers. The bill will provide important protections for workers
against unreasonable fees to access their pay.
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House lawmakers voted 63-39-1 last week to send House Bill 5622 to
the Senate. The bill, crafted by the attorney general's office and
sponsored by Rep. Arthur Turner, 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 offering payroll cards loaded with wages every pay
period. The payroll cards are similar to prepaid gift cards and can
be used to make purchases and ATM withdrawals. But unlike a prepaid
gift card, employees are charged numerous fees to access or spend
their earned wages, including 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 use their card, make a purchase or check
their account balance.
![](http://archives.lincolndailynews.com/2014/Apr/16/images/ads/current/brickey_sda102513.png)
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 office crafted the legislation
to put a stop to the harmful practices.
"My goal is to ensure low-wage workers receive all of their
wages. It makes no sense that the amount you receive on a gift card
is better protected than the wages you receive on a payroll card,"
Madigan said. "This bill is designed to ensure that workers actually
get all of their wages instead of losing them to unreasonable fees."
The bill will help ensure payroll cards benefit employees by
prohibiting fees for simply accessing funds or checking an account
balance, while also providing employers with flexibility to meet the
proposed requirements. The bill will provide important guidance 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," 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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Sen. Kwame Raoul is sponsoring the bill in the Senate.
House Bill 5622 would:
-
Ensure employees
can access their wages without incurring fees.
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Ensure employees
can access their account balances and their transaction
histories without fees.
-
Place sensible
protections on payroll cards to safeguard employees.
-
Preserve
employees' right to choose the payment method that works for
them, whether that method is check, direct deposit or payroll
card.
-
Require employers
to give employees notice of the terms of the payroll card
program.
-
Prohibit fees for overdrafts, declined
transactions and purchases.
[Text from file received from the office of
Illinois Attorney General Lisa
Madigan]
![](http://archives.lincolndailynews.com/2014/Apr/16/images/ads/current/agee_sda_031714.png)
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