© 2025 American Payroll Institute, Inc.
June 2, 2025 Volume 27 Issue 11
Indiana Earned Wage Access Bill to Take Effect Next Year
Effective January 1, 2026, earned wage access (EWA)
providers in Indiana will be subject to certain requirements,
including registration and fee requirements [H.B. 1125,
L. 2025]. The law will be administered and enforced by the
Indiana Department of Financial Institutions (DFI). PayrollOrg’s
Government Relations Task Force State and Local Topics
Subcommittee submitted a letter in support of the bill to the
Indiana House of Representatives earlier this year. Under the
law, EWA services do not include small loans. EWA services are
not violations of laws governing deductions from wages.
Definition of provider
A provider is defined as a person in the business of offering
and providing EWA services to employees. It does not include:
a service provider that is not contractually obligated to fund
proceeds delivered as part of EWA services, such as a payroll
service provider that verifies an employee’s available earnings
an employer that offers a portion of salary, wages, or other
income directly to its employees or contractors before the
normally scheduled pay date or an entity that provides EWA
services and reports an employee’s payment or nonpayment of
outstanding proceeds or fees to a consumer reporting agency.
Provider registration and fees
A provider cannot engage in the business of offering or
providing EWA services or advertise as offering EWA services
unless it obtains a license in Indiana. A provider will need to
apply for a license and renew the license annually. The DFI
will set the licensing requirements and fees. Until the DFI sets
an initial license fee and annual renewal fees (not to exceed
$2,500), the initial license fee and renewal fees will be $1,500.
The renewal will be due by December 31 of each year. The
renewal must include a description of each material change
in the information submitted by the licensee in its original
application.
An applicant for an EWA services license must provide
and maintain a surety bond of $100,000 or an amount equal
to the licensee’s average daily provision of EWA proceeds to
Indiana employees (as calculated for the most recent calendar
quarter), up to a maximum of $250,000. A licensee that
maintains a bond in the maximum amount ($250,000) is not
required to calculate the average daily provision of proceeds. A
licensee can carry a bond for more than the maximum amount
required by law.
The DFI can revoke or suspend a provider’s license for
failure to file any required renewal forms or pay any renewal
fees later than 60 days after the due date.
Provider requirements
A licensed provider must:
(1) Develop and implement policies and procedures
to respond to questions raised by employees and address
complaints in a timely manner.
(2) Offer the employee at least one reasonable option to
obtain EWA proceeds at no cost.
(3) Clearly explain how to choose the no-cost option and
ensure that any no-cost option offered is clearly displayed and
is in the same color, font, font size, and general location as any
option that has a fee.
(4) Ensure any option to obtain EWA proceeds that has a
fee is not the default option.
(5) Ensure that if an employee elects not to pay a tip,
any amount charged as part of the EWA transaction is not
increased because of the decision not to pay a tip.
(6) Make sure that the delivery of the proceeds is no
later than 1 business day after the employee initiates the
transaction if an employee chooses a no-cost option to receive
EWA proceeds.
(7) Inform the employee of their rights under the EWA
services agreement and fully disclose all fees associated with
the EWA services before entering into an agreement with the
employee.
(8) Receive consent from the employee for any material
changes to the terms and conditions of the EWA services
agreement before implementing the changes.
(9) Allow the employee to cancel EWA services at any
time without a cancellation fee.
(10) Provide proceeds by any means mutually agreed
upon by the provider and employee.
(11) Reimburse the employee for the full amount of any
overdraft or insufficient funds fees imposed by the employee’s
bank under certain circumstances.
(12) Ensure the provider’s software does not subject a user
to unsolicited email ads, surveys, or notifications if the user
elects not to receive them.
There are additional requirements concerning tips that
generally apply to the direct-to-consumer EWA model, rather
than the employer-integrated model of EWA services.
Prohibitions on providers
A provider cannot share a portion of fees or tips with
an employer. Using an employee’s credit score to determine
eligibility for EWA services, the amount of proceeds an
employee can receive, or how often an employee can use
EWA services is prohibited. Providers cannot accept payment
of outstanding proceeds or fees via credit card. Late fees
and interest cannot be charged to an employee. A provider
cannot attempt to compel an employee to repay outstanding
proceeds or fees via use of unsolicited phone calls, lawsuits, or
third-party debt collection services.
June 2, 2025 Volume 27 Issue 11
Indiana Earned Wage Access Bill to Take Effect Next Year
Effective January 1, 2026, earned wage access (EWA)
providers in Indiana will be subject to certain requirements,
including registration and fee requirements [H.B. 1125,
L. 2025]. The law will be administered and enforced by the
Indiana Department of Financial Institutions (DFI). PayrollOrg’s
Government Relations Task Force State and Local Topics
Subcommittee submitted a letter in support of the bill to the
Indiana House of Representatives earlier this year. Under the
law, EWA services do not include small loans. EWA services are
not violations of laws governing deductions from wages.
Definition of provider
A provider is defined as a person in the business of offering
and providing EWA services to employees. It does not include:
a service provider that is not contractually obligated to fund
proceeds delivered as part of EWA services, such as a payroll
service provider that verifies an employee’s available earnings
an employer that offers a portion of salary, wages, or other
income directly to its employees or contractors before the
normally scheduled pay date or an entity that provides EWA
services and reports an employee’s payment or nonpayment of
outstanding proceeds or fees to a consumer reporting agency.
Provider registration and fees
A provider cannot engage in the business of offering or
providing EWA services or advertise as offering EWA services
unless it obtains a license in Indiana. A provider will need to
apply for a license and renew the license annually. The DFI
will set the licensing requirements and fees. Until the DFI sets
an initial license fee and annual renewal fees (not to exceed
$2,500), the initial license fee and renewal fees will be $1,500.
The renewal will be due by December 31 of each year. The
renewal must include a description of each material change
in the information submitted by the licensee in its original
application.
An applicant for an EWA services license must provide
and maintain a surety bond of $100,000 or an amount equal
to the licensee’s average daily provision of EWA proceeds to
Indiana employees (as calculated for the most recent calendar
quarter), up to a maximum of $250,000. A licensee that
maintains a bond in the maximum amount ($250,000) is not
required to calculate the average daily provision of proceeds. A
licensee can carry a bond for more than the maximum amount
required by law.
The DFI can revoke or suspend a provider’s license for
failure to file any required renewal forms or pay any renewal
fees later than 60 days after the due date.
Provider requirements
A licensed provider must:
(1) Develop and implement policies and procedures
to respond to questions raised by employees and address
complaints in a timely manner.
(2) Offer the employee at least one reasonable option to
obtain EWA proceeds at no cost.
(3) Clearly explain how to choose the no-cost option and
ensure that any no-cost option offered is clearly displayed and
is in the same color, font, font size, and general location as any
option that has a fee.
(4) Ensure any option to obtain EWA proceeds that has a
fee is not the default option.
(5) Ensure that if an employee elects not to pay a tip,
any amount charged as part of the EWA transaction is not
increased because of the decision not to pay a tip.
(6) Make sure that the delivery of the proceeds is no
later than 1 business day after the employee initiates the
transaction if an employee chooses a no-cost option to receive
EWA proceeds.
(7) Inform the employee of their rights under the EWA
services agreement and fully disclose all fees associated with
the EWA services before entering into an agreement with the
employee.
(8) Receive consent from the employee for any material
changes to the terms and conditions of the EWA services
agreement before implementing the changes.
(9) Allow the employee to cancel EWA services at any
time without a cancellation fee.
(10) Provide proceeds by any means mutually agreed
upon by the provider and employee.
(11) Reimburse the employee for the full amount of any
overdraft or insufficient funds fees imposed by the employee’s
bank under certain circumstances.
(12) Ensure the provider’s software does not subject a user
to unsolicited email ads, surveys, or notifications if the user
elects not to receive them.
There are additional requirements concerning tips that
generally apply to the direct-to-consumer EWA model, rather
than the employer-integrated model of EWA services.
Prohibitions on providers
A provider cannot share a portion of fees or tips with
an employer. Using an employee’s credit score to determine
eligibility for EWA services, the amount of proceeds an
employee can receive, or how often an employee can use
EWA services is prohibited. Providers cannot accept payment
of outstanding proceeds or fees via credit card. Late fees
and interest cannot be charged to an employee. A provider
cannot attempt to compel an employee to repay outstanding
proceeds or fees via use of unsolicited phone calls, lawsuits, or
third-party debt collection services.
