HF 2874

as introduced - 94th Legislature (2025 - 2026) Posted on 03/26/2025 11:34am

A bill for an act
relating to commerce; regulating earned wage access services; proposing coding
for new law in Minnesota Statutes, chapter 47.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

new text begin [47.86] EARNED WAGE ACCESS SERVICES.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin For purposes of this section, the following terms have the
meanings given.
new text end

new text begin (a) "Consumer" means an individual who resides in Minnesota.
new text end

new text begin (b) "Consumer-directed wage access services" means delivering to a consumer access
to earned but unpaid income that is based on the consumer's representations and the provider's
reasonable determination of the consumer's earned but unpaid income.
new text end

new text begin (c) "Earned but unpaid income" means salary, wages, compensation, or other income
that a consumer or an employer represents and that a provider reasonably determines: (1)
has been earned or accrued to the benefit of the consumer in exchange for the consumer
providing services to the employer or on behalf of the employer, including (i) on an hourly,
project-based, piecework, or other basis, and (ii) in circumstances in which the consumer
acts as an employer's independent contractor; and (2) has not been paid to the consumer by
the employer at the time the proceeds are paid.
new text end

new text begin (d) "Earned wage access services" means providing consumer-directed wage access
services, employer-integrated wage access services, or both.
new text end

new text begin (e) "Earned wage access services provider" or "provider" means a person that is in the
business of providing earned wage access services to consumers. Earned wage access
services provider does not include:
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new text begin (1) a service provider, including but not limited to a payroll service provider, whose role
may include verifying the available earnings but is not contractually obligated to fund any
proceeds delivered as part of an earned wage access service; or
new text end

new text begin (2) an employer that offers a portion of salary, wages, or compensation directly to the
employer's employees or independent contractors before the normally scheduled pay date.
new text end

new text begin (f) "Employer" means a person who employs a consumer or other person and who is
contractually obligated to pay a consumer earned but unpaid income in exchange for the
consumer providing services to the employer or on behalf of the employer, including: (1)
on an hourly, project-based, piecework, or other basis; and (2) in circumstances in which
the consumer acts as an independent contractor with respect to the employer. Employer
does not include a customer of an employer or other person whose obligation to make a
payment of salary, wages, compensation, or other income to a consumer is not based on the
provision of services by that consumer for or on behalf of the person.
new text end

new text begin (g) "Employer-integrated wage access services" means delivering to a consumer access
to earned but unpaid income that is based on employment, income, or attendance data
obtained directly or indirectly from an employer or an employer's payroll service provider.
new text end

new text begin (h) "Fee" means: (1) a fee imposed by a provider for delivery or expedited delivery of
proceeds to a consumer; or (2) a subscription or membership fee imposed by a provider for
a bona fide group of services that include earned wage access services. Fee does not include
a voluntary tip, gratuity, or other donation.
new text end

new text begin (i) "Outstanding proceeds" means proceeds remitted to a consumer by a provider that
have not yet been repaid to the provider.
new text end

new text begin (j) "Proceeds" means a payment to a consumer by a provider that is based on earned but
unpaid income.
new text end

new text begin Subd. 2. new text end

new text begin Requirements and prohibitions. new text end

new text begin (a) A provider must:
new text end

new text begin (1) develop and implement policies and procedures to respond to questions raised by
consumers and address complaints from consumers in an expedient manner;
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new text begin (2) whenever the provider offers a consumer the option to receive proceeds for a fee, or
solicits an optional tip, gratuity, or other donation, offer to the consumer at least one
reasonable option to obtain proceeds at no cost to the consumer and clearly explain how to
elect the no-cost option;
new text end

new text begin (3) before entering into an agreement with a consumer to provide earned wage access
services:
new text end

new text begin (i) inform the consumer of the consumer's rights under the agreement; and
new text end

new text begin (ii) clearly and conspicuously disclose all fees associated with the earned wage access
services;
new text end

new text begin (4) inform the consumer of any material changes to the terms and conditions of the
earned wage access services before implementing the changes;
new text end

new text begin (5) allow the consumer to cancel use of the provider's earned wage access services at
any time without incurring a cancellation fee imposed by the provider;
new text end

new text begin (6) comply with all applicable local, state, and federal privacy and information security
laws;
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new text begin (7) if the provider solicits, charges, or receives a tip, gratuity, or other donation from a
consumer:
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new text begin (i) clearly and conspicuously disclose to the consumer immediately prior to each
transaction that a tip, gratuity, or other donation amount may be zero and is voluntary; and
new text end

new text begin (ii) clearly and conspicuously disclose in the provider's service contract with the consumer
and elsewhere that tips, gratuities, or donations are voluntary and that the offering of earned
wage access services, including the amount of proceeds a consumer is eligible to request
and the frequency with which proceeds are provided to a consumer, is not contingent on
whether the consumer pays any tip, gratuity, or other donation or on the size of the tip,
gratuity, or other donation;
new text end

new text begin (8) provide proceeds to a consumer by any means mutually agreed upon by the consumer
and the provider; and
new text end

new text begin (9) if seeking repayment of outstanding proceeds or payment of fees or other amounts
owed, including voluntary tips, gratuities, or other donations, in connection with the activities
covered by this section from a consumer's account at a depository institution, including by
means of electronic fund transfer:
new text end

new text begin (i) comply with applicable provisions of the federal Electronic Fund Transfer Act, United
States Code, title 15, sections 1693 to 1693r, and regulations adopted under the Electronic
Fund Transfer Act; and
new text end

new text begin (ii) reimburse the consumer for the full amount of any overdraft or insufficient funds
fees imposed on a consumer by the consumer's depository institution that were caused by
the provider attempting to seek payment of any outstanding proceeds, fees, or other payments
in connection with the activities covered by this section, including voluntary tips, gratuities,
or other donations, on a date before or in an incorrect amount from the date or amount
disclosed to the consumer. A provider is not subject to the requirements under this item
with respect to payments of outstanding proceeds or fees incurred by a consumer through
fraudulent or other unlawful means.
new text end

new text begin (b) A provider must not:
new text end

new text begin (1) impose a fee greater than $7 in connection with a fee described under subdivision
1, paragraph (h);
new text end

new text begin (2) share with an employer a portion of any fees, voluntary tips, gratuities, or other
donations that were received from or charged to a consumer for earned wage access services;
new text end

new text begin (3) require a consumer's credit report or a credit score to be provided or issued by a
consumer reporting agency to determine a consumer's eligibility for earned wage access
services;
new text end

new text begin (4) accept payment of outstanding proceeds, fees, voluntary tips, gratuities, or other
donations from a consumer by means of a credit card or charge card;
new text end

new text begin (5) charge a consumer a late fee, deferral fee, interest, or any other penalty or charge
for failure to pay outstanding proceeds, fees, voluntary tips, gratuities, or other donations;
new text end

new text begin (6) report to a consumer reporting agency or debt collector information about the
consumer regarding the provider's inability to be repaid outstanding proceeds, fees, voluntary
tips, gratuities, or other donations;
new text end

new text begin (7) compel or attempt to compel payment by a consumer of outstanding proceeds, fees,
voluntary tips, gratuities, or other donations to the provider through any of the following
means:
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new text begin (i) a lawsuit against the consumer in a court of competent jurisdiction;
new text end

new text begin (ii) use of a third party to pursue collection from the consumer on the provider's behalf;
or
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new text begin (iii) sale of outstanding proceeds, fees, voluntary tips, gratuities, or other donations to
a third-party collector or debt buyer for collection from a consumer; or
new text end

new text begin (8) if the provider solicits, charges, or receives tips, gratuities, or other donations from
a consumer, mislead or deceive a consumer about the voluntary nature of the tips, gratuities,
or donations or represent that the tips, gratuities, or donations benefit a specific individual
or group of individuals.
new text end

new text begin (c) The limitations set forth under paragraph (b), clause (7), do not preclude a provider
from: (1) using a method specified under paragraph (b), clause (7), to compel payment of
outstanding proceeds or fees incurred by a consumer through fraudulent or other unlawful
means; or (2) pursuing an employer for breach of the employer's contractual obligations to
the provider.
new text end

new text begin (d) A provider may use the mailing address or state of residence provided by an individual
or that individual's employer to determine the individual's state of residence for purposes
of this section.
new text end

new text begin Subd. 3. new text end

new text begin Applicability. new text end

new text begin (a) This section does not apply to a person doing business under
and as permitted by any law of Minnesota or of the United States relating to banks, savings
associations, trust companies, or credit unions.
new text end

new text begin (b) Notwithstanding any other provision of law, earned wage access services offered
and provided by a licensed earned wage access services provider in accordance with this
section is not:
new text end

new text begin (1) in violation of or noncompliance with law governing: (i) deductions from payroll,
salary, wages, compensation, or other income; or (ii) the purchase, sale, or assignment of
or an order for earned but unpaid income;
new text end

new text begin (2) a loan or other form of credit or debt. A provider is not a creditor, debt collector, or
lender with respect to a loan or other form of credit or debt; or
new text end

new text begin (3) money transmission. A provider is not a money transmitter with respect to money
transmission.
new text end

new text begin (c) Notwithstanding any other law, fees, voluntary tips, gratuities, or other donations
paid in accordance with this section to an earned wage access services provider are not
interest or finance charges.
new text end

new text begin (d) If this section conflicts with any other provision of law, this section prevails.
new text end

new text begin Subd. 4. new text end

new text begin Licensure. new text end

new text begin (a) Before a person offers or provides earned wage access services
to consumers, the person must obtain a license from the commissioner as an earned wage
access services provider. For purposes of this subdivision, "person" includes a person that
does not have a physical location in Minnesota but that offers and provides earned wage
access services electronically via the Internet.
new text end

new text begin (b) The application for licensure must be made in accordance with procedures under
sections 56.02, 56.04, 56.07, and 56.08.
new text end

new text begin (c) A license must state: (1) the address where the business is to be conducted or that
the business is to be conducted entirely online; (2) the full name of the licensee; and (3) if
the licensee is (i) a copartnership or association, the names of the copartnership or
association's members, and (ii) a corporation, the date and place of the corporation's
incorporation. The license must be conspicuously posted in the licensee's place of business
or made available on the licensee's website. A license is not transferable or assignable.
new text end

new text begin (d) Notwithstanding paragraph (a), a person who provided earned wage access services
in Minnesota as of January 1, 2025, may, until the commissioner has processed the person's
license application, continue to provide earned wage access services in Minnesota without
a license if the person submitted a license application within three months after the
commissioner prescribed the form and content of an application and otherwise complies
with this section.
new text end

new text begin Subd. 5. new text end

new text begin Books of account; annual report; schedule of charges; disclosures. new text end

new text begin (a) A
licensee must keep and use in the business books, accounts, and records that enable the
commissioner to determine whether the licensee is complying with this section.
new text end

new text begin (b) A licensee shall file a report to the commissioner on or before March 15 each year.
The report must include the information the commissioner reasonably requires concerning
the earned wage access services business and operations during the preceding calendar year,
including:
new text end

new text begin (1) gross revenue attributable to the licensee's earned wage access services;
new text end

new text begin (2) the total number of transactions in which the provider provided proceeds to consumers;
new text end

new text begin (3) the total number of unique consumers to whom the provider provided proceeds;
new text end

new text begin (4) the total dollar amount of proceeds the provider provided to consumers; and
new text end

new text begin (5) the total dollar amount of fees, voluntary tips, gratuities, or other donations the
provider received from consumers.
new text end

new text begin Subd. 6. new text end

new text begin Examinations. new text end

new text begin (a) For the purpose of discovering violations of this section or
securing information lawfully required by the commissioner, the commissioner may
investigate the earned wage access services provider and examine books, accounts, records,
and files, regardless of whether the person acts or claims to act (1) as principal or agent, or
(2) under or without the authority of this section. The commissioner has free access to the
offices, places of business, books, accounts, papers, records, files, safes, and vaults of all
persons that must register under this section. The commissioner is authorized to require the
attendance of and to examine under oath all persons whose testimony the commissioner
requires relative to the earned wage access services business or to the subject matter of an
examination, investigation, or hearing.
new text end

new text begin (b) A licensee must pay to the commissioner the amount required under section 46.131,
and the commissioner may maintain an action for the recovery of the costs in any court of
competent jurisdiction.
new text end

new text begin Subd. 7. new text end

new text begin Complaints alleging violation. new text end

new text begin A consumer that has reason to believe this
section has been violated may file a written complaint with the commissioner setting forth
the details of the alleged violation. Upon receiving the complaint, the commissioner may
inspect the pertinent books, records, letters, and contracts of the provider involved. The
commissioner may assess the provider a fee to cover the necessary costs of an investigation
under this subdivision. The commissioner may maintain an action to recover the costs in a
court of competent jurisdiction.
new text end

new text begin Subd. 8. new text end

new text begin Suspension or revocation of license. new text end

new text begin (a) The commissioner may, upon 30
days' notice to the licensee stating the contemplated action and the grounds forming the
basis for the action, and upon reasonable opportunity for the licensee to be heard, revoke a
license issued under this section if the commissioner finds:
new text end

new text begin (1) a licensee failed to (i) pay the annual license fee required by this section, or (ii)
comply with any demand, ruling, or requirement the commissioner lawfully made pursuant
to the authority of this section;
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new text begin (2) a licensee violated any material provision of this section or any rule adopted by the
commissioner under this section; or
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new text begin (3) a fact or condition exists that, if the fact or condition had existed at the time of the
original application for the license, would have warranted the commissioner refusing to
originally issue the license.
new text end

new text begin (b) The commissioner may, upon three days' notice and a hearing, suspend any license
for a period not exceeding 30 days pending an investigation.
new text end

new text begin (c) The commissioner may revoke or suspend a license if grounds for revocation or
suspension occur or exist. If the commissioner finds that the grounds for revocation or
suspension apply to multiple offices operated by the licensee, the commissioner must revoke
or suspend all of the licenses issued to the licensee to which the grounds for revocation or
suspension apply.
new text end

new text begin (d) A licensee may surrender a license by delivering to the commissioner written notice
that the licensee surrenders the license. The surrender does not affect the licensee's civil or
criminal liability for acts committed prior to the surrender.
new text end

new text begin (e) A revocation, suspension, or surrender of a license does not impair or affect the
obligation of a preexisting lawful contract between the licensee and a consumer.
new text end

new text begin (f) A license issued under this section remains effective until the license is surrendered,
revoked, or suspended under this section. The commissioner may reinstate suspended
licenses or issue new licenses to a licensee whose license or licenses have been revoked if
no fact or condition exists that would have warranted the commissioner to initially refuse
to issue the license under this section.
new text end

new text begin (g) When the commissioner revokes or suspends a license issued under this section, the
commissioner must file a written order that contains the evidence and reasons supporting
the revocation or suspension. A copy of the written order must be delivered to the licensee.
new text end