B2B Payments

Illinois Moves To Add Payroll Card Protections

By Jeffrey Green (@epaymentsguy) (https://twitter.com/epaymentsguy)

The Illinois Senate is considering a bill approved in the state’s House of Representatives on April 10 that would limit how much consumers pay for payroll cards and provide them with certain additional protections.

The bill amends the Illinois Wage Payment and Collection Act, and it establishes requirements for the use of payroll cards by employers. Included in the legislation are certain protections, such as a provision that receipt of wages by means of a payroll card may not be a condition of employment. The bill would require employers to provide an itemized list of fees and to offer a paper check option or direct deposit.

If approved in the Senate and signed into law, the legislation would take effective Jan. 1, 2015.

Last year, the Illinois Attorney General’s Office reportedly began an investigation into “unreasonable fees attached to the cards,” according to StaffingIndustry.com. The office said some workers were being charged a $5 inactivity fee, $3 for requesting a monthly statement, or 50 cents each time they used their card to make a purchase or to check their balance.

According to Illinois Attorney General Lisa Madigan’s office, the legislation now pending before the Senate would ensure workers may access their funds, account balances and account histories without incurring fees. It also would ban fees for overdrafts, declined transactions and purchases.

The bill now pending in the Senate originally included a ban on inactivity fees, but that the legislation was amended to allows such fees after one year of no activity. In a Chicago Tribune report, Madigan said she opposed efforts to impose the fees after 90 days of no activity, noting that gift cards in the state may never impose such fees.

"In fact, in Illinois, currently the amount that you receive on a gift card has better protections than the wages that you would receive on a payroll card," Madigan said.

State Rep. Arthur Turner, D-Chicago, the bill’s chief sponsor of the bill, told the Tribune the concessions were made to get it through the House. The Illinois Retail Merchants Association, which had opposed the bill, reportedly changed its position to neutral after the bill was amended.



The How We Shop Report, a PYMNTS collaboration with PayPal, aims to understand how consumers of all ages and incomes are shifting to shopping and paying online in the midst of the COVID-19 pandemic. Our research builds on a series of studies conducted since March, surveying more than 16,000 consumers on how their shopping habits and payments preferences are changing as the crisis continues. This report focuses on our latest survey of 2,163 respondents and examines how their increased appetite for online commerce and digital touchless methods, such as QR codes, contactless cards and digital wallets, is poised to shape the post-pandemic economy.

1 Comment