A legislative Act has been introduced in Wisconsin to regulate businesses providing earned wage access services. Under this measure, earned wage access services is defined as the business of providing consumer-directed wage access services or employer-integrated wage access services. It also clarifies that fees do not include voluntary tips or donations. The measure mandates such businesses to be licensed by the Division of Banking, irrespective of their physical location.
The licensing process requires businesses to submit detailed information about their operation, including the provider’s name, address, federal employer identification number, and a precise description of how the services are provided. A nonrefundable fee is also required as part of the application process, along with an annual fee to maintain the license.
The measure introduces certain prohibitions for licensed providers. These include sharing any portion of fees with an employer, requiring a customer to provide a credit report for service eligibility, charging late fees, and compelling payment through a lawsuit, among others.
The Act also necessitates licensed providers to maintain a surety bond of $25,000. The Division has the authority to investigate any allegations of violations of this measure by a provider. Violations can result in civil penalties ranging from $100 to $10,000.
The measure was introduced on October 30, 2023, and a public hearing was held on December 6, 2023. However, no action has been taken yet. It continues to be eligible for consideration. The potential impact seeks to provide a more regulated and transparent operation of earned wage access services, ensuring protection for both the service provider and the consumer.
As always, Cornerstone is closely monitoring the outcome of this measure, will be providing updates and standing by to handle all licensing and bonds needs to ensure compliance for our clients.