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© 2023 American Payroll Institute, Inc. Nevada First State to Enact Earned Wage Access Law Nevada recently became the first state to enact an earned wage access (EWA) law [S.B. 290, L. 2023]. It defines terms, requires EWA providers to be licensed in the state, and sets requirements for EWA services. It states that EWA services, provided by a licensee in compliance with the law, are not considered a loan. PayrollOrg’s Government Relations Task Force (GRTF) celebrated the historic win. The GRTF spent the past two years working with key Nevada legislators, writing letters, and testifying to pass the bill and gain the governor’s signature (see PAYSTATE UPDATE, Issue 6, Vol. 25). Several other states are considering EWA bills, including: California, Georgia, Kansas, Mississippi, Missouri, New York, North Carolina, Texas, Vermont, and Virginia. Effective dates Most provisions of the law will take effect on July 1, 2024. It became effective June 13, 2023, for the purpose of adopting regulations and performing other administrative tasks necessary to implement the act. A person who was engaged in the business of providing EWA services as of January 1, 2023, is allowed to continue to do so without obtaining a license until December 31, 2024, if the person submits an application for a license before January 1, 2024. Definitions under the law Direct-to-consumer. Direct-to-consumer EWA services means the delivery to a user of an advance of earned but unpaid income based on data that is not employment, income, or attendance data, but obtained directly from an employer or an employer’s payroll service provider. Earned but unpaid income. Earned but unpaid income is salary, wages, compensation, or other income that: (1) a user or employer has represented, and a provider has reasonably determined to have been earned or accrued to the benefit of the user in exchange for the user’s having provided services to the employer or on behalf of the employer and (2) has not been paid to the user by the employer at the time a provider delivers payment of the proceeds to a user. It includes salary, wages, compensation, or other earned income on a hourly, project-based, piecework, or other basis. It also includes income earned through services provided by an independent contractor. EWA services. This means the delivery to a user of money that represents earned but unpaid income. It includes both employer-integrated and direct-to-consumer EWA services. Employer. An employer includes a person who employs a user of EWA services, or any other person who is contractually obligated to pay a user earned but unpaid income. It does not include: a customer of an employer or any other person whose obligation to make a payment of salary, wages, compensation, or other income to a user is not based on the provision of services by that user. Employer-integrated earned wage access services. This means the delivery to a user of access to earned but unpaid income determined based on employment, income, or attendance data obtained directly or indirectly from an employer, including an employer’s payroll service provider. Fee. This includes a fee imposed by a provider for delivery or expediated delivery of proceeds to a user, and a subscription or membership fee for EWA services. Provider. This does not include payroll service providers (PSPs). PSPs may verify the available earnings but are not contractually obligated to fund EWA service proceeds to a user. User. A user is a person living in Nevada who receives EWA services. EWA provider requirements An EWA provider is required to develop and implement policies and procedures to respond to questions raised by users and address complaints from users in a timely manner. Before entering into an agreement with a user for EWA services, the provider must inform the user of their rights under the agreement and fully and clearly disclose all fees associated with the EWA services. A provider must allow a user to cancel participation in an agreement for EWA services at any time without incurring a fee. EWA providers must comply with all local, state, and federal privacy and information security laws. Tips. If an EWA provider charges or receives a tip, gratuity, or donation from a user, the provider must conspicuously disclose to the user that any tip paid by the user does not provide a direct benefit to any specific employee of the provider or any other person. The provider must also offer an option for the user to select zero as an amount for a tip. If an EWA provider seeks payment of outstanding proceeds, fees, or other payments, including voluntary tips, from a user’s bank account (including through a preauthorized electronic funds transfer), the provider must comply with applicable federal laws. The provider must also reimburse the user for the full amount of any overdraft fees imposed by the user’s bank, if the fees were caused by the provider attempting to seek payment of outstanding proceeds on a date before, or in an incorrect amount from the information disclosed to the user. This does not apply to payments incurred by a user through fraudulent means. EWA providers are prohibited from: sharing fees, voluntary tips, gratuities, or other donations received from or charged to a user for EWA services with an employer. EWA providers cannot: use a user’s credit report or credit score to determine access to EWA services charge a late fee, deferral fee, interest, June 26, 2023 Volume 25 Issue 13