by Earned Wage Access (EWA) services continue to be a popular option among employers and employees around the country. As discussed in our September 5, 2022 post, Regulatory Questions Remain About Pay On-Demand, there are tax, consumer protection and other legal issues with the use of such services. Recently states have begun to address concerns through regulation. Wisconsin just joined Nevada and Missouri in setting up regulations for EWA services.
Effective September 1, 2024, the new Wisconsin law requires EWA providers to obtain a license from the state in order to provide services. The process requires the providers to:
- Issue disclosures regarding business and products;
- Meet the requirements of privacy laws;
- Register with the Nationwide Multistate System and Registry; and
- Submit an annual report to the state regarding use of the services.
EWA providers will be required to offer at least one free option for employees to obtain the services. They will also be required to inform employees using the services of all fees and potential costs. There are other limitations regarding fees including barring fee sharing with employers and limiting the charging of late fees or other penalties for an employee’s failure to make timely fee payments.
The state has not yet updated its website with further information on the new law and its implementation. Employers intending to offer EWA services in Wisconsin should monitor the website at http://www.wisconsin.gov for more information.
