Below: Watch Ida King discuss how payroll card fees ate away at her paycheck


Businesses across the country, particularly industries that employ low-wage workers, are turning to payroll cards as a cost-saving method for paying employees. Distributing earnings via payroll cards can be a cheaper alternative for employers than distributing paper checks. For workers who do not have bank accounts where money can be directly deposited, a payroll card can be safer than carrying cash. Unfortunately, payroll cards are often littered with fees to access the funds, check the card balance and transaction history, and make debit transactions. For low-wage workers, these fees can eat away at much-needed income.

Current federal and Illinois laws require employers to give workers the option of a paper check or direct deposit to an account, but are silent on the use of payroll cards. Workers paid through payroll cards often find their wages eaten up by fees.

“Illinois workers should not have to pay fees to access their wages, conduct transactions, or find out their account balance. If an employer chooses to use a payroll card, it cannot be at the expense of their employees,” said Dory Rand, president of Woodstock Institute. “This legislation enacts strong consumer protections that ensure workers have the right to receive their wages as they choose, include clear disclosure of any costs associated with payroll cards, and prohibit excessive and usurious fees.”

Specifically, HB 5622:

  • Prohibits employers from automatically enrolling employees in payroll cards—employees must opt in;
  • Requires employers to provide an itemized list of all fees associated with the payroll card;
  • Enables employees to access their full wages without any fee at least once every two weeks;
  • Prevents fees for point of sale transactions and for accessing transaction history or account balances;
  • Limits the use of declined transaction fees and inactivity fees; and,
  • Prohibits linking the payroll card to any form of credit, including overdraft fees or services.

In a press release today, Attorney General Madigan said, “Before today, there were better protections on gift cards than payroll cards in Illinois. But with this new law, which will be the strongest of its kind in the country, Illinois employees will no longer have to pay just to get their pay.”

This law is a significant step towards ensuring that lower-wage workers have access to their hard-earned wages without losing them to unfair and deceptive fees. The law goes into effect January 1, 2015.

For more information, contact Katie Buitrago at or 312.368.0310.