Arkansas Enacts Earned Wage Access Services Act

What happened?

On March 20, 2025, Arkansas Governor Sarah Huckabee Sanders signed HB 1517 into law, establishing the Earned Wage Access Services Act. This legislation imposes substantive requirements on providers and sets up a financial services oversight regime for earned wage access services, also known as on-demand pay services, which allow workers to access their earned but unpaid income before payday.

Overview:

Arkansas Enacts Earned Wage Access Services Act (HB 1517): This act aims to ensure transparency, consumer protection, and fair practices in providing earned wage access services.

• Applicability:
  
  • Exemptions: The act does not apply to corporations organized under banking, savings, and loans, or credit union laws.

• Key Provisions:
  
  • Disclosure of Fees: Providers must disclose all fees to employers and employees.
  • Cancellation Rights: Employees can cancel these services without incurring a cancellation fee.
  • Information Security: Providers must comply with relevant information security laws to protect employee data.

• Provider Regulations:
  
  • Residency Determination: Providers use the consumer’s mailing address to determine residency.
  • No Lending or Debt Collection: Providers are not considered lenders or debt collectors.
  • Consumer Support: Providers must develop policies to respond to consumer questions and complaints.
  • No-Cost Option: Providers must offer at least one no-cost option for consumers to obtain proceeds.
  • Fee Disclosure: All fees must be fully disclosed to consumers.
  • Cancellation: Consumers can cancel services without a fee.
  • Privacy Compliance: Providers must comply with privacy and information security laws.

• Consumer Protections:
  
  • Voluntary Tips: Tips, gratuities, or donations are voluntary and not contingent on service provision.
  • Repayment Regulations: Providers must comply with the Electronic Fund Transfer Act and reimburse consumers for overdraft fees caused by incorrect payment attempts.
  • Prohibited Actions: Providers cannot share fees with employers, require credit reports, accept credit card payments for proceeds, charge late fees, or compel payment through lawsuits or third-party collections.

Source References

• AR Earned Wage Access Services Act (Act 347)

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