September 22, 2020

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September 21, 2020

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Illinois Enacts Pay Card Legislation

Joining the ranks of states which have enacted a specific statute to address the payment of wages via payroll debit card, Illinois Governor Pat Quinn last Wednesday signed legislation regulating payroll debit card practices in the state.  The new law is generally consistent with the Illinois Department of Labor’s recent historical enforcement practice, in that it forbids making use of the cards a condition of employment, and preserves an employee’s right to demand payment of wages via paper check or direct deposit payment.  Employers also must obtain written consent from employees paid through a payroll card program, and the program cannot be linked to forms of credit such as overdraft fees, cash advances or loans against future wages.

“HB 5622 does little to modify the law in Illinois; it simply codifies and clarifies it.  Most of its provisions are consistent with informal interpretations the Department had already provided, and common sense approaches we have been recommending to employers for years,” observed Chicago-based Jackson Lewis Shareholder Neil Dishman.

Although some states have enacted legislation and/or issued formal guidance regarding this increasingly common payroll debit card practice, in many states the law is unclear.  Multi-state employers must analyze the wage payment options available to them in all jurisdictions in which they do business and seek legal counsel as needed.

Jackson Lewis P.C. © 2020National Law Review, Volume IV, Number 223

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About this Author

Noel Tripp Principal Employment lawyer at Jackson Lewis Law Firm
Principal

Noel P. Tripp is a Principal in the Long Island, New York, office of Jackson Lewis P.C. Since joining Jackson Lewis as a summer associate in May 2005, he has practiced exclusively in employment law.

Mr. Tripp has been involved in matters pending before federal and state courts and administrative agencies covering the gamut of employment-related matters from discrimination and workplace harassment to wage/hour disputes and affirmative-action compliance. His principal focus is the defense of class and collective action...

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