1.1 A bill for an act
1.2 relating to commerce; regulating earned wage access services; proposing coding
1.3 for new law in Minnesota Statutes, chapter 47.
1.4BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:
1.5 Section 1. [47.86] EARNED WAGE ACCESS SERVICES.
1.6 Subdivision 1.Definitions.For purposes of this section, the following terms have the
1.7meanings given.
1.8 (a) "Consumer" means an individual who resides in Minnesota.
1.9 (b) "Consumer-directed wage access services" means delivering to a consumer access
1.10to earned but unpaid income that is based on the consumer's representations and the provider's
1.11reasonable determination of the consumer's earned but unpaid income.
1.12 (c) "Earned but unpaid income" means salary, wages, compensation, or other income
1.13that a consumer or an employer represents and that a provider reasonably determines: (1)
1.14has been earned or accrued to the benefit of the consumer in exchange for the consumer
1.15providing services to the employer or on behalf of the employer, including (i) on an hourly,
1.16project-based, piecework, or other basis, and (ii) in circumstances in which the consumer
1.17acts as an employer's independent contractor; and (2) has not been paid to the consumer by
1.18the employer at the time the proceeds are paid.
1.19 (d) "Earned wage access services" means providing consumer-directed wage access
1.20services, employer-integrated wage access services, or both.
1Section 1.
REVISOR RSI/DD 25-0375703/17/25
State of Minnesota
This Document can be made available
in alternative formats upon request
HOUSE OF REPRESENTATIVES
H. F. No. 2874
NINETY-FOURTH SESSION
Authored by Kresha, Huot, Kotyza-Witthuhn and Myers03/26/2025
The bill was read for the first time and referred to the Committee on Commerce Finance and Policy 2.1 (e) "Earned wage access services provider" or "provider" means a person that is in the
2.2business of providing earned wage access services to consumers. Earned wage access
2.3services provider does not include:
2.4 (1) a service provider, including but not limited to a payroll service provider, whose role
2.5may include verifying the available earnings but is not contractually obligated to fund any
2.6proceeds delivered as part of an earned wage access service; or
2.7 (2) an employer that offers a portion of salary, wages, or compensation directly to the
2.8employer's employees or independent contractors before the normally scheduled pay date.
2.9 (f) "Employer" means a person who employs a consumer or other person and who is
2.10contractually obligated to pay a consumer earned but unpaid income in exchange for the
2.11consumer providing services to the employer or on behalf of the employer, including: (1)
2.12on an hourly, project-based, piecework, or other basis; and (2) in circumstances in which
2.13the consumer acts as an independent contractor with respect to the employer. Employer
2.14does not include a customer of an employer or other person whose obligation to make a
2.15payment of salary, wages, compensation, or other income to a consumer is not based on the
2.16provision of services by that consumer for or on behalf of the person.
2.17 (g) "Employer-integrated wage access services" means delivering to a consumer access
2.18to earned but unpaid income that is based on employment, income, or attendance data
2.19obtained directly or indirectly from an employer or an employer's payroll service provider.
2.20 (h) "Fee" means: (1) a fee imposed by a provider for delivery or expedited delivery of
2.21proceeds to a consumer; or (2) a subscription or membership fee imposed by a provider for
2.22a bona fide group of services that include earned wage access services. Fee does not include
2.23a voluntary tip, gratuity, or other donation.
2.24 (i) "Outstanding proceeds" means proceeds remitted to a consumer by a provider that
2.25have not yet been repaid to the provider.
2.26 (j) "Proceeds" means a payment to a consumer by a provider that is based on earned but
2.27unpaid income.
2.28 Subd. 2.Requirements and prohibitions.(a) A provider must:
2.29 (1) develop and implement policies and procedures to respond to questions raised by
2.30consumers and address complaints from consumers in an expedient manner;
2.31 (2) whenever the provider offers a consumer the option to receive proceeds for a fee, or
2.32solicits an optional tip, gratuity, or other donation, offer to the consumer at least one
2Section 1.
REVISOR RSI/DD 25-0375703/17/25 3.1reasonable option to obtain proceeds at no cost to the consumer and clearly explain how to
3.2elect the no-cost option;
3.3 (3) before entering into an agreement with a consumer to provide earned wage access
3.4services:
3.5 (i) inform the consumer of the consumer's rights under the agreement; and
3.6 (ii) clearly and conspicuously disclose all fees associated with the earned wage access
3.7services;
3.8 (4) inform the consumer of any material changes to the terms and conditions of the
3.9earned wage access services before implementing the changes;
3.10 (5) allow the consumer to cancel use of the provider's earned wage access services at
3.11any time without incurring a cancellation fee imposed by the provider;
3.12 (6) comply with all applicable local, state, and federal privacy and information security
3.13laws;
3.14 (7) if the provider solicits, charges, or receives a tip, gratuity, or other donation from a
3.15consumer:
3.16 (i) clearly and conspicuously disclose to the consumer immediately prior to each
3.17transaction that a tip, gratuity, or other donation amount may be zero and is voluntary; and
3.18 (ii) clearly and conspicuously disclose in the provider's service contract with the consumer
3.19and elsewhere that tips, gratuities, or donations are voluntary and that the offering of earned
3.20wage access services, including the amount of proceeds a consumer is eligible to request
3.21and the frequency with which proceeds are provided to a consumer, is not contingent on
3.22whether the consumer pays any tip, gratuity, or other donation or on the size of the tip,
3.23gratuity, or other donation;
3.24 (8) provide proceeds to a consumer by any means mutually agreed upon by the consumer
3.25and the provider; and
3.26 (9) if seeking repayment of outstanding proceeds or payment of fees or other amounts
3.27owed, including voluntary tips, gratuities, or other donations, in connection with the activities
3.28covered by this section from a consumer's account at a depository institution, including by
3.29means of electronic fund transfer:
3.30 (i) comply with applicable provisions of the federal Electronic Fund Transfer Act, United
3.31States Code, title 15, sections 1693 to 1693r, and regulations adopted under the Electronic
3.32Fund Transfer Act; and
3Section 1.
REVISOR RSI/DD 25-0375703/17/25 4.1 (ii) reimburse the consumer for the full amount of any overdraft or insufficient funds
4.2fees imposed on a consumer by the consumer's depository institution that were caused by
4.3the provider attempting to seek payment of any outstanding proceeds, fees, or other payments
4.4in connection with the activities covered by this section, including voluntary tips, gratuities,
4.5or other donations, on a date before or in an incorrect amount from the date or amount
4.6disclosed to the consumer. A provider is not subject to the requirements under this item
4.7with respect to payments of outstanding proceeds or fees incurred by a consumer through
4.8fraudulent or other unlawful means.
4.9 (b) A provider must not:
4.10 (1) impose a fee greater than $7 in connection with a fee described under subdivision
4.111, paragraph (h);
4.12 (2) share with an employer a portion of any fees, voluntary tips, gratuities, or other
4.13donations that were received from or charged to a consumer for earned wage access services;
4.14 (3) require a consumer's credit report or a credit score to be provided or issued by a
4.15consumer reporting agency to determine a consumer's eligibility for earned wage access
4.16services;
4.17 (4) accept payment of outstanding proceeds, fees, voluntary tips, gratuities, or other
4.18donations from a consumer by means of a credit card or charge card;
4.19 (5) charge a consumer a late fee, deferral fee, interest, or any other penalty or charge
4.20for failure to pay outstanding proceeds, fees, voluntary tips, gratuities, or other donations;
4.21 (6) report to a consumer reporting agency or debt collector information about the
4.22consumer regarding the provider's inability to be repaid outstanding proceeds, fees, voluntary
4.23tips, gratuities, or other donations;
4.24 (7) compel or attempt to compel payment by a consumer of outstanding proceeds, fees,
4.25voluntary tips, gratuities, or other donations to the provider through any of the following
4.26means:
4.27 (i) a lawsuit against the consumer in a court of competent jurisdiction;
4.28 (ii) use of a third party to pursue collection from the consumer on the provider's behalf;
4.29or
4.30 (iii) sale of outstanding proceeds, fees, voluntary tips, gratuities, or other donations to
4.31a third-party collector or debt buyer for collection from a consumer; or
4Section 1.
REVISOR RSI/DD 25-0375703/17/25 5.1 (8) if the provider solicits, charges, or receives tips, gratuities, or other donations from
5.2a consumer, mislead or deceive a consumer about the voluntary nature of the tips, gratuities,
5.3or donations or represent that the tips, gratuities, or donations benefit a specific individual
5.4or group of individuals.
5.5 (c) The limitations set forth under paragraph (b), clause (7), do not preclude a provider
5.6from: (1) using a method specified under paragraph (b), clause (7), to compel payment of
5.7outstanding proceeds or fees incurred by a consumer through fraudulent or other unlawful
5.8means; or (2) pursuing an employer for breach of the employer's contractual obligations to
5.9the provider.
5.10 (d) A provider may use the mailing address or state of residence provided by an individual
5.11or that individual's employer to determine the individual's state of residence for purposes
5.12of this section.
5.13 Subd. 3.Applicability.(a) This section does not apply to a person doing business under
5.14and as permitted by any law of Minnesota or of the United States relating to banks, savings
5.15associations, trust companies, or credit unions.
5.16 (b) Notwithstanding any other provision of law, earned wage access services offered
5.17and provided by a licensed earned wage access services provider in accordance with this
5.18section is not:
5.19 (1) in violation of or noncompliance with law governing: (i) deductions from payroll,
5.20salary, wages, compensation, or other income; or (ii) the purchase, sale, or assignment of
5.21or an order for earned but unpaid income;
5.22 (2) a loan or other form of credit or debt. A provider is not a creditor, debt collector, or
5.23lender with respect to a loan or other form of credit or debt; or
5.24 (3) money transmission. A provider is not a money transmitter with respect to money
5.25transmission.
5.26 (c) Notwithstanding any other law, fees, voluntary tips, gratuities, or other donations
5.27paid in accordance with this section to an earned wage access services provider are not
5.28interest or finance charges.
5.29 (d) If this section conflicts with any other provision of law, this section prevails.
5.30 Subd. 4.Licensure.(a) Before a person offers or provides earned wage access services
5.31to consumers, the person must obtain a license from the commissioner as an earned wage
5.32access services provider. For purposes of this subdivision, "person" includes a person that
5Section 1.
REVISOR RSI/DD 25-0375703/17/25 6.1does not have a physical location in Minnesota but that offers and provides earned wage
6.2access services electronically via the Internet.
6.3 (b) The application for licensure must be made in accordance with procedures under
6.4sections 56.02, 56.04, 56.07, and 56.08.
6.5 (c) A license must state: (1) the address where the business is to be conducted or that
6.6the business is to be conducted entirely online; (2) the full name of the licensee; and (3) if
6.7the licensee is (i) a copartnership or association, the names of the copartnership or
6.8association's members, and (ii) a corporation, the date and place of the corporation's
6.9incorporation. The license must be conspicuously posted in the licensee's place of business
6.10or made available on the licensee's website. A license is not transferable or assignable.
6.11 (d) Notwithstanding paragraph (a), a person who provided earned wage access services
6.12in Minnesota as of January 1, 2025, may, until the commissioner has processed the person's
6.13license application, continue to provide earned wage access services in Minnesota without
6.14a license if the person submitted a license application within three months after the
6.15commissioner prescribed the form and content of an application and otherwise complies
6.16with this section.
6.17 Subd. 5.Books of account; annual report; schedule of charges; disclosures.(a) A
6.18licensee must keep and use in the business books, accounts, and records that enable the
6.19commissioner to determine whether the licensee is complying with this section.
6.20 (b) A licensee shall file a report to the commissioner on or before March 15 each year.
6.21The report must include the information the commissioner reasonably requires concerning
6.22the earned wage access services business and operations during the preceding calendar year,
6.23including:
6.24 (1) gross revenue attributable to the licensee's earned wage access services;
6.25 (2) the total number of transactions in which the provider provided proceeds to consumers;
6.26 (3) the total number of unique consumers to whom the provider provided proceeds;
6.27 (4) the total dollar amount of proceeds the provider provided to consumers; and
6.28 (5) the total dollar amount of fees, voluntary tips, gratuities, or other donations the
6.29provider received from consumers.
6.30 Subd. 6.Examinations.(a) For the purpose of discovering violations of this section or
6.31securing information lawfully required by the commissioner, the commissioner may
6.32investigate the earned wage access services provider and examine books, accounts, records,
6Section 1.
REVISOR RSI/DD 25-0375703/17/25 7.1and files, regardless of whether the person acts or claims to act (1) as principal or agent, or
7.2(2) under or without the authority of this section. The commissioner has free access to the
7.3offices, places of business, books, accounts, papers, records, files, safes, and vaults of all
7.4persons that must register under this section. The commissioner is authorized to require the
7.5attendance of and to examine under oath all persons whose testimony the commissioner
7.6requires relative to the earned wage access services business or to the subject matter of an
7.7examination, investigation, or hearing.
7.8 (b) A licensee must pay to the commissioner the amount required under section 46.131,
7.9and the commissioner may maintain an action for the recovery of the costs in any court of
7.10competent jurisdiction.
7.11 Subd. 7.Complaints alleging violation.A consumer that has reason to believe this
7.12section has been violated may file a written complaint with the commissioner setting forth
7.13the details of the alleged violation. Upon receiving the complaint, the commissioner may
7.14inspect the pertinent books, records, letters, and contracts of the provider involved. The
7.15commissioner may assess the provider a fee to cover the necessary costs of an investigation
7.16under this subdivision. The commissioner may maintain an action to recover the costs in a
7.17court of competent jurisdiction.
7.18 Subd. 8.Suspension or revocation of license.(a) The commissioner may, upon 30
7.19days' notice to the licensee stating the contemplated action and the grounds forming the
7.20basis for the action, and upon reasonable opportunity for the licensee to be heard, revoke a
7.21license issued under this section if the commissioner finds:
7.22 (1) a licensee failed to (i) pay the annual license fee required by this section, or (ii)
7.23comply with any demand, ruling, or requirement the commissioner lawfully made pursuant
7.24to the authority of this section;
7.25 (2) a licensee violated any material provision of this section or any rule adopted by the
7.26commissioner under this section; or
7.27 (3) a fact or condition exists that, if the fact or condition had existed at the time of the
7.28original application for the license, would have warranted the commissioner refusing to
7.29originally issue the license.
7.30 (b) The commissioner may, upon three days' notice and a hearing, suspend any license
7.31for a period not exceeding 30 days pending an investigation.
7.32 (c) The commissioner may revoke or suspend a license if grounds for revocation or
7.33suspension occur or exist. If the commissioner finds that the grounds for revocation or
7Section 1.
REVISOR RSI/DD 25-0375703/17/25 8.1suspension apply to multiple offices operated by the licensee, the commissioner must revoke
8.2or suspend all of the licenses issued to the licensee to which the grounds for revocation or
8.3suspension apply.
8.4 (d) A licensee may surrender a license by delivering to the commissioner written notice
8.5that the licensee surrenders the license. The surrender does not affect the licensee's civil or
8.6criminal liability for acts committed prior to the surrender.
8.7 (e) A revocation, suspension, or surrender of a license does not impair or affect the
8.8obligation of a preexisting lawful contract between the licensee and a consumer.
8.9 (f) A license issued under this section remains effective until the license is surrendered,
8.10revoked, or suspended under this section. The commissioner may reinstate suspended
8.11licenses or issue new licenses to a licensee whose license or licenses have been revoked if
8.12no fact or condition exists that would have warranted the commissioner to initially refuse
8.13to issue the license under this section.
8.14 (g) When the commissioner revokes or suspends a license issued under this section, the
8.15commissioner must file a written order that contains the evidence and reasons supporting
8.16the revocation or suspension. A copy of the written order must be delivered to the licensee.
8Section 1.
REVISOR RSI/DD 25-0375703/17/25