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Attorney General Madigan: House Approves Legislation to Protect Low Wage Workers

Springfield—(ENEWSPF)—April 11, 2014. Attorney General Lisa Madigan yesterday praised House lawmakers for passing legislation that puts in place protections for low wage workers who receive their wages on a payroll card, an increasingly common method of payment used by Illinois employers. The bill will provide important protections for workers against unreasonable fees to access their pay.

House lawmakers voted 63-39-1 to send House Bill 5622 to the Senate. The bill, crafted by Attorney General Madigan’s office and sponsored by Rep. Arthur Turner, addresses this increasingly popular form of payment used by employers of hourly, low wage workers at fast food restaurants and stores. Instead of issuing paper checks, employers are offering payroll cards loaded with wages every pay period that are similar to pre-paid gift cards and can be used to make purchases and ATM withdrawals. But unlike a pre-paid gift card, employees are charged numerous fees to access or spend their earned wages, including: a $5 account inactivity fee, a $3 fee for requesting a monthly statement of their account or 50 cent fees every time they want to use their card, make a purchase or check their account balance.

Last year, the Attorney General’s office began investigating the use of payroll cards after receiving complaints from employees in Illinois and discovered the unreasonable fees attached to the cards and other practices that reduce the employees’ earnings. The office crafted the legislation to put a stop to the harmful practices.

“My goal is to ensure low wage workers receive all of their wages. It makes no sense that the amount you receive on a gift card is better protected than the wages you receive on a payroll card,” Madigan said. “This bill is designed to ensure that workers actually get all of their wages instead of losing them to unreasonable fees.”

The bill will help ensure payroll cards benefit employees by prohibiting fees for simply accessing funds or checking an account balance, while also providing employers with flexibility to meet the proposed requirements. The bill will provide important guidance for employers wishing to use this new form of wage payment.

“Ideally, every worker would be able to have a bank account and build their savings each pay period,” Turner said. “Unfortunately this is not the case for employees throughout the state of Illinois. Allowing businesses to pay their employees through electronic debit cards gives workers a secure, convenient and no-cost alternative to a paycheck.”

House Bill 5622 would:

Ensure employees can access their wages without incurring fees;

Ensure employees can access their account balances and their transaction histories without fees;

Place sensible protections on payroll cards to safeguard employees;

Preserve employees’ right to choose the payment method that works for them, whether that method is check, direct deposit or payroll card;

Require employers to give employees notice of the terms of the payroll card program; and

Prohibit fees for overdrafts, declined transactions and purchases.

Sen. Kwame Raoul will sponsor the bill in the Senate.

Source: illinoisattorneygeneral.gov


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