House Passes Bill Protecting Workers from Payroll Card Fees

Last week, the Illinois House passed legislation (HB5622) that would protect workers from the hidden and abusive fees of many payroll cards. The bill was sponsored by Representative Turner and supported by the Illinois Attorney General.

Payroll cards are growing in popularity in Illinois. Some Illinois employers are no longer paying their employees with a check or via a direct deposit into a bank account. Rather they are loading wages onto a payroll card. Payroll cards are particularly being used for workers that are unbanked.

Large employers like Sears, U-Haul, UPS, and McDonalds are using this method to pay many of their workers. At first glance this may seem like a great idea and offer a convenience for people who don’t already have a traditional bank account. The problems arise as soon as the worker swipes the card, and in some cases even before that.

Payroll cards are not regulated at the federal or state levels. Currently, businesses are not required to fully disclose the terms of the payroll card program or ensure that workers can access their hard earned wages without incurring fees.

At a recent Stepping Out of Poverty forum, hosted by Community Organizing & Family Issues (COFI), workers shared their stories on how these fees have repeatedly drained their budgets. Often times workers would use their cards only to find surprisingly low balances because of abusive and hidden fees that ate away at their balance.

HB5622 would provide consumer protections from many of these fees, including:

• Monthly Fees
• Point of transaction fees
• Fees to check your balance
• Customer service fees
• Overdraft fees

The bill also requires employers to give employees notice of the terms of the card and obtain their voluntary consent before enrolling them in a payroll card program. It also guarantees that employees can access their full wages at least once every two weeks without incurring a fee.

HB5622 now moves to the Senate where it is being sponsored by Senator Raoul. If you or someone you know has a story about payroll cards we need your voice! Find your State Senator and urge them to support HB5622. To share your payroll card story and be part of the movement contact IABG.