Employers in Illinois can no longer force workers to accept payment in the form of payroll cards.
Under the newly signed law, employers will still have to offer direct deposit or paper checks, and can’t make the payroll card system a condition of employment. Illinois Attorney General Lisa Madigan says an investigation by her office found these cards charged fees for making transactions or checking the balance.
“They diminished people’s wages,” Madigan said, “and what the most significant aspect of this bill is, is the fact that you shouldn’t have to pay to get your pay.”
Madigan says there can be some benefit to payroll cards for those without a bank account. Under the law, an employee can choose to have their wages put on a payroll card, but only after the employer discloses all the possible fees.
Some businesses have begun favoring the cards as a cost cutting tool, since issuing them instead of a paper check can save businesses a few dollars per employee every pay period.