Since the beginning of 2025, sixteen states have proposed legislation to regulate earned wage access. These states would join Kansas, Missouri, Nevada, South Carolina, and Wisconsin, which have each enacted legislation to regulate advances of funds so employees can access their funds before payday.
Generally, these bills aim to regulate providers of direct-to-consumer or employer-integrated wage access service. Earned wage access is generally defined as advances that are based on a consumer’s earned but unpaid wages. The proposed bills exacerbate the current lack of consistency in the earned wage space, as some states consider the product a “loan” while other states expressly exclude the product from their state’s definition of “loan.” In addition to proposing substantive requirements, these products vary in treatment of common fees such as voluntary tipping and expedited transfer fees. States have also proposed licensing or registration regimes for providers of earned wage access.
The following states have introduced earned wage access legislation:
- Arizona SB 1582
- Colorado HB 1020
- Connecticut HB 5007
- Indiana HB 1125
- Maryland HB 1294
- Mississippi HB 1307 / SB 2496
- Missouri HB 576 / SB 293 / HB 1113
- New Mexico HB 59
- New York AB 258 / AB 682
- North Dakota HB 1393
- Oklahoma HB 2086 / SB 781
- Oregon HB 2131 / SB 481
- Texas SB 938 / HB 2043
- Utah HB 279
- Vermont HB 99
- Washington HB 1063
It is fair to say that the boom of legislation in the earned wage access space arose as the result of the Consumer Financial Protection Bureau’s Proposed Interpretive Rule from July 2024 that categorizes earned wage access products as “credit” subject to the substantive obligations under the federal Truth in Lending Act and Regulation Z. The continued lack of consistency from state to state, and potentially between state and federal obligations, creates tension with compliance obligations including but not limited to finance charge treatment and required disclosures.
Reprinted with permission from the American Bar Association’s Business Law Today February 2025 Month-In-Brief: Business & Regulated Industries.
