HB5622 98TH GENERAL ASSEMBLY

LRB098 19212 JLS 54364 b

98TH GENERAL ASSEMBLY
State of Illinois
2013 and 2014
HB5622

Introduced , by Rep. Arthur Turner

SYNOPSIS AS INTRODUCED:

820 ILCS 115/2	from Ch. 48, par. 39m-2
820 ILCS 115/4	from Ch. 48, par. 39m-4
820 ILCS 115/14.5 new

Amends the Illinois Wage Payment and Collection Act. Establishes requirements for the use of payroll cards by employers. Provides that receipt of wages by means of a payroll card may not be a condition of employment. Requires certain disclosures to be made to employees before using payroll cards. Requires the offer of an alternative means of payment to be available. Establishes limits on fees. Effective January 1, 2015.

FISCAL NOTE ACT MAY APPLY

STATE MANDATES ACT MAY REQUIRE REIMBURSEMENT

A BILL FOR

AN ACT concerning employment.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 5. The Illinois Wage Payment and Collection Act is amended by changing Sections 2 and 4 and by adding Section 14.5 as follows:

(820 ILCS 115/2) (from Ch. 48, par. 39m-2)

Sec. 2. For all employees, other than separated employees, "wages" shall be defined as any compensation owed an employee by an employer pursuant to an employment contract or agreement between the 2 parties, whether the amount is determined on a time, task, piece, or any other basis of calculation. Payments to separated employees shall be termed "final compensation" and shall be defined as wages, salaries, earned commissions, earned bonuses, and the monetary equivalent of earned vacation and earned holidays, and any other compensation owed the employee by the employer pursuant to an employment contract or agreement between the 2 parties. Where an employer is legally committed through a collective bargaining agreement or otherwise to make contributions to an employee benefit, trust or fund on the basis of a certain amount per hour, day, week or other period of time, the amount due from the employer to such employee benefit, trust, or fund shall be defined as "wage supplements", subject to the wage collection provisions of this Act.

As used in this Act, the term "employer" shall include any individual, partnership, association, corporation, limited liability company, business trust, employment and labor placement agencies where wage payments are made directly or indirectly by the agency or business for work undertaken by employees under hire to a third party pursuant to a contract between the business or agency with the third party, or any person or group of persons acting directly or indirectly in the interest of an employer in relation to an employee, for which one or more persons is gainfully employed.

As used in this Act, the term "employee" shall include any individual permitted to work by an employer in an occupation, but shall not include any individual:

(1) who has been and will continue to be free from control and direction over the performance of his work, both under his contract of service with his employer and in fact; and

(2) who performs work which is either outside the usual course of business or is performed outside all of the places of business of the employer unless the employer is in the business of contracting with third parties for the placement of employees; and

(3) who is in an independently established trade, occupation, profession or business.

The following terms shall apply to an employer's use of payroll cards to pay wages to an employee under the requirements of this Act:

"Payroll card" means a card issued to an employee by an employer or other payroll card issuer as a means of accessing the employee's payroll card account.

"Payroll card account" means an account into which an employer directly or indirectly deposits each participating employee's wages on a recurring basis through an electronic fund transfer.

"Payroll card issuer" means an employer, bank, financial institution, or other entity that issues a payroll card to an employee under an employer payroll card program.

(Source: P.A. 94-1025, eff. 7-14-06.)

(820 ILCS 115/4) (from Ch. 48, par. 39m-4)

Sec. 4. All wages earned by any employee during a semi-monthly or bi-weekly pay period shall be paid to such employee not later than 13 days after the end of the pay period in which such wages were earned. All wages earned by any employee during a weekly pay period shall be paid not later than 7 days after the end of the weekly pay period in which the wages were earned. All wages paid on a daily basis shall be paid insofar as possible on the same day as the wages were earned, or not later in any event than 24 hours after the day on which the wages were earned. Wages of executive, administrative and professional employees, as defined in the Federal Fair Labor Standards Act of 1938, may be paid on or before 21 calendar days after the period during which they are earned.

The terms of this Section shall not apply, if there exists a valid collective bargaining agreement which provides for a different date or for different arrangements for the payment of wages.

Employers shall pay to workers on strike or layoff, no later than the next regular payday, all wages earned up to the time of such strike or layoff.

Any employee who is absent at the time fixed for payment, or who for any other reason is not paid at that time, shall be paid upon demand at any time within a period of 5 days after the time fixed for payment; and after the expiration of the 5 day period, payment shall be made upon 5 days demand. Payment to the absent employee shall be made by mail if the employee so requests in writing.

All wages and final compensation shall be paid in lawful money of the United States, by check, redeemable upon demand and without discount at a bank or other financial institution readily available to the employee, or by deposit of funds in an account in a bank or other financial institution designated by the employee, or by a payroll card that meets the requirements of Section 14.5. No employer may designate a particular financial institution, bank, savings bank, savings and loan, or currency exchange for the exclusive payment or deposit of a check for wages. No financial institution, bank, savings bank, savings and loan, or currency exchange shall refuse to honor a check for wages that exclusively designates, in violation of this Section, a particular bank, savings bank, savings and loan, or currency exchange as the exclusive place of payment or deposit except to the extent the bank, savings bank, savings and loan, or currency exchange is otherwise excused from honoring the check under Section 3-111 of the Uniform Commercial Code because the bank, savings bank, savings and loan, or currency exchange is not the drawee or the maker of the check.

(Source: P.A. 89-364, eff. 8-18-95.)

(820 ILCS 115/14.5 new)

Sec. 14.5. Payroll cards. An employer using a payroll card to pay an employee's wages shall meet the following requirements:

(1) The employer shall not make receipt of wages by payroll card a condition of employment for any employee.

(2) The employer shall not initiate payment of wages to the employee by electronic fund transfer to a payroll card account unless:

(A) the employer provides the employee with a written disclosure, in plain language, explaining the terms and conditions of the payroll card account option, including:

(i) an itemized list of all fees that may be deducted from the employee's payroll card account by the employer or payroll card issuer; and

(ii) a notice that third parties may assess transaction fees in addition to the fees assessed by the employee's payroll card issuer;

(B) the employer also offers the employee the options of payment by paper check or direct deposit to a depository account designated by the employee; and

(C) the employer obtains the employee's voluntary written consent to receive the wages by payroll card.

(3) A payroll card program offered by the employer shall provide the employee with:

(A) at least one ATM withdrawal per pay period at no cost to the employee and at a location within a reasonable distance of the employee's place of employment;

(B) at least one method of withdrawing the entire balance on the card for each pay period without incurring a fee;

(C) at the employee's request, one transaction history each month that includes all deposits, withdrawals, deductions, or charges by any entity from or to the employee's payroll card account at no cost to the employee; and

(D) a reasonable method for the employee to obtain the payroll card account balance on the payroll card at any time without incurring a fee.

(4) An employer may not use a payroll card program that includes fees for account inactivity, declined transactions, point of sale transactions, or an application, initiation, loading, participation, or any other fee to receive wages or to hold the payroll card.

(5) The payroll card or payroll card account may not be linked to any form of credit including, but not limited to, a loan against future pay or a cash advance on future pay.

(6) An employee paid wages by payroll card may request to be paid wages by any other method set forth in Section 4. Following the request, the employer shall, within 2 pay periods, begin payment to the employee by the allowable method requested by the employee.

Section 99. Effective date. This Act takes effect January 1, 2015.