© 2024 American Payroll Institute, Inc.
Kansas Becomes Fourth State to Pass Earned Wage Access Law
Effective April 19, 2024, a new law regulates earned wage
access (EWA) services and creates licensing requirements
for EWA providers in Kansas [H.B. 2560, L. 2024]. The state
agency in charge of regulation is the Kansas Office of
the Banking Commissioner (OBC). Missouri, Nevada, and
Wisconsin have also passed EWA laws. EWA services are not
considered a loan or form of credit under Kansas law.
Licensing requirements
EWA providers in Kansas are required to register with the
OBC. Applications will require a fee and must be renewed
annually. Registration will expire on December 31 of each
year. An application for registration must include:
(1) The applicant’s name, business address, telephone
number, and website address
(2) The name and address of each owner, officer, director,
member, partner, or principal of the applicant
(3) A description of the ownership interest of any officer,
official, director, member, partner, principal, or employee
in any affiliate or subsidiary of the applicant or in any other
entity that provides any service relating to EWA and
(4) Any other information the OBC deems necessary to
evaluate the financial responsibility, condition, character,
qualifications, and fitness of the applicant.
Providers that were doing business in the state as of
January 1, 2024, can continue to do so but must submit an
application for registration within three months after the
registration form is made available. Providers will be required
to be bonded.
Requirements for EWA providers
Providers must ensure that all EWA payments are
provided on a non-recourse basis and must treat all fees
and non-mandatory payments as non-recourse payment
obligations. Non-recourse means that the provider will not
compel repayment by certain methods. Providers must also
develop and implement policies and procedures to respond
to questions raised by employees and address complaints in
a timely manner.
Before entering into an agreement with a consumer for
the provision of EWA, the provider must: inform the employee
of their rights under the agreement fully and clearly disclose
all fees associated with the EWA services and clearly describe
how the employee may obtain payments at no cost.
Notification of changes. Providers must inform
consumers of any material changes to the terms and
conditions of the EWA services before implementing the
changes. The EWA payments must be provided to the
employee via any means mutually agreed upon by the
employee and the provider.
Cancellation. Employees must be allowed to cancel
EWA services at any time without incurring a cancellation fee
or penalty imposed by the provider.
Tips. If the provider charges or receives a tip, gratuity, or
other donation from an employee, the provider must disclose
to the employee immediately prior to each transaction that a
tip amount may be voluntary. The provider must also disclose
in its agreement with the employee that tips are voluntary
and that EWA services are not contingent on whether the
employee pays a tip or the size of any tip.
Repayment. If a provider will seek repayment of
outstanding amounts owed from an employee’s bank by EFT,
the provider must inform the employee when the provider
will make each attempt to seek repayment comply with a
relevant federal laws and reimburse the employee for the full
amount of any overdraft or insufficient funds fees imposed
on the employee caused by the provider attempting to seek
repayment.
Prohibitions on providers
Providers cannot compel the repayment of outstanding
EWA payments by a civil lawsuit use of a third-party
debt collector use of telephone collection calls or sale of
outstanding amounts to a third-party debt collector.
Providers also cannot: charge late fees, interest, or any
other penalty for failure to repay outstanding amounts
charge an unreasonable fee to provide expediated delivery
of funds to an employee share a portion of fees charged to
an employee for EWA services with an employer condition
the amount of funds that a consumer is able to request or
the frequency with which an employee is eligible to request
funds on whether an employee pays fees mislead consumers
about the voluntary nature of tips charge a fee in connection
with deferring collection of outstanding funds beyond the
original repayment date accept credit as payment from an
employee of outstanding funds or nonmandatory payments
report an employee’s payment or failed repayment to a credit
reporting agency or debt collector or require a credit score to
determine an employee’s eligibility for EWA services.
Annual reporting requirements
By April 1 of each year, providers must file an annual
report with the OCB on EWA services provided in Kansas in
the prior year. The OCB will create the annual report form to
be used.
Recordkeeping
Each provider must maintain and preserve complete
and adequate records of each EWA services contract during
the term of the contract and for five years from the date the
provider last provided EWA services to the employee.
May 13, 2024 Volume 26 Issue 10
Kansas Becomes Fourth State to Pass Earned Wage Access Law
Effective April 19, 2024, a new law regulates earned wage
access (EWA) services and creates licensing requirements
for EWA providers in Kansas [H.B. 2560, L. 2024]. The state
agency in charge of regulation is the Kansas Office of
the Banking Commissioner (OBC). Missouri, Nevada, and
Wisconsin have also passed EWA laws. EWA services are not
considered a loan or form of credit under Kansas law.
Licensing requirements
EWA providers in Kansas are required to register with the
OBC. Applications will require a fee and must be renewed
annually. Registration will expire on December 31 of each
year. An application for registration must include:
(1) The applicant’s name, business address, telephone
number, and website address
(2) The name and address of each owner, officer, director,
member, partner, or principal of the applicant
(3) A description of the ownership interest of any officer,
official, director, member, partner, principal, or employee
in any affiliate or subsidiary of the applicant or in any other
entity that provides any service relating to EWA and
(4) Any other information the OBC deems necessary to
evaluate the financial responsibility, condition, character,
qualifications, and fitness of the applicant.
Providers that were doing business in the state as of
January 1, 2024, can continue to do so but must submit an
application for registration within three months after the
registration form is made available. Providers will be required
to be bonded.
Requirements for EWA providers
Providers must ensure that all EWA payments are
provided on a non-recourse basis and must treat all fees
and non-mandatory payments as non-recourse payment
obligations. Non-recourse means that the provider will not
compel repayment by certain methods. Providers must also
develop and implement policies and procedures to respond
to questions raised by employees and address complaints in
a timely manner.
Before entering into an agreement with a consumer for
the provision of EWA, the provider must: inform the employee
of their rights under the agreement fully and clearly disclose
all fees associated with the EWA services and clearly describe
how the employee may obtain payments at no cost.
Notification of changes. Providers must inform
consumers of any material changes to the terms and
conditions of the EWA services before implementing the
changes. The EWA payments must be provided to the
employee via any means mutually agreed upon by the
employee and the provider.
Cancellation. Employees must be allowed to cancel
EWA services at any time without incurring a cancellation fee
or penalty imposed by the provider.
Tips. If the provider charges or receives a tip, gratuity, or
other donation from an employee, the provider must disclose
to the employee immediately prior to each transaction that a
tip amount may be voluntary. The provider must also disclose
in its agreement with the employee that tips are voluntary
and that EWA services are not contingent on whether the
employee pays a tip or the size of any tip.
Repayment. If a provider will seek repayment of
outstanding amounts owed from an employee’s bank by EFT,
the provider must inform the employee when the provider
will make each attempt to seek repayment comply with a
relevant federal laws and reimburse the employee for the full
amount of any overdraft or insufficient funds fees imposed
on the employee caused by the provider attempting to seek
repayment.
Prohibitions on providers
Providers cannot compel the repayment of outstanding
EWA payments by a civil lawsuit use of a third-party
debt collector use of telephone collection calls or sale of
outstanding amounts to a third-party debt collector.
Providers also cannot: charge late fees, interest, or any
other penalty for failure to repay outstanding amounts
charge an unreasonable fee to provide expediated delivery
of funds to an employee share a portion of fees charged to
an employee for EWA services with an employer condition
the amount of funds that a consumer is able to request or
the frequency with which an employee is eligible to request
funds on whether an employee pays fees mislead consumers
about the voluntary nature of tips charge a fee in connection
with deferring collection of outstanding funds beyond the
original repayment date accept credit as payment from an
employee of outstanding funds or nonmandatory payments
report an employee’s payment or failed repayment to a credit
reporting agency or debt collector or require a credit score to
determine an employee’s eligibility for EWA services.
Annual reporting requirements
By April 1 of each year, providers must file an annual
report with the OCB on EWA services provided in Kansas in
the prior year. The OCB will create the annual report form to
be used.
Recordkeeping
Each provider must maintain and preserve complete
and adequate records of each EWA services contract during
the term of the contract and for five years from the date the
provider last provided EWA services to the employee.
May 13, 2024 Volume 26 Issue 10
