Several states have passed laws or issued guidance regarding earned wage access (EWA). Let’s take a look at what different states require from EWA providers.
What is EWA?
Also called on-demand pay, EWA allows employees to contract with a provider so they can request a certain amount (or share) of accrued wages to be paid to them prior to payday. These funds are then recouped by the provider via payroll deductions or bank account debits on the subsequent payday (also see the article “Addressing the Earned Wage Access Challenge” in the April 2025 issue of PAYTECH).
In general, when a state requires that an EWA product be “fully non-recourse,” it usually means that the provider obtains no legal or contractual right to repayment against the employee, does not engage in any debt collection activities with regard to an unpaid balance, does not sell or assign any unpaid balance to a third party, and does not report any non-payment to any consumer credit reporting agency.
State Laws, Guidance
Below is a high-level overview of the state requirements from recent legislation and guidance:
ARIZONA
According to the state Attorney General, an EWA product offered as a no-interest and non-recourse product does not fall within the state definition of a consumer loan. Therefore, a provider of such an EWA product is not required to obtain a license as a consumer lender under state law.
CALIFORNIA
EWA providers are required to register with the California Department of Financial Protection and Innovation. Providers must disclose methods used and all costs and fees employees may be subject to for participation in an EWA program. EWA providers and their business partners are prohibited from: any debt collection activities; placing the amount due as a debt with, or sale to, a third party; and reporting the failure to pay to a consumer reporting agency.
CONNECTICUT
Third-party EWA products are voluntary arrangements between workers and EWA providers and are outside the jurisdiction of the Connecticut Department of Labor (CTDOL). The CTDOL does not have jurisdiction over EWA providers. However, EWA products that use the employer-integrated model may implicate state wage payment laws, because the CTDOL maintains jurisdiction over the employer and employee relationship.
State law requires that when the employer passes fees along to employees in the form of payroll deductions, the employer must obtain written authorization from the employee on a form approved by the CTDOL.
KANSAS
EWA providers in Kansas are required to register with the Kansas Office of the Banking Commissioner. Applications require a fee and must be renewed annually. Providers must ensure that all EWA payments are provided on a non-recourse basis and must treat all fees and non-mandatory payments as non-recourse payment obligations.
Providers must also develop and implement policies and procedures to respond to questions raised by employees and address complaints in a timely manner.
MARYLAND
The Maryland Office of Financial Regulation issued an advisory to describe EWA products and address potential risks for employees and employers. It defined and explained EWA and also warned employees that certain products could have associated fees.
MISSOURI
EWA providers are required to register with the Missouri Division of Finance. Providers are also required to: create procedures for managing consumer questions and complaints in a timely manner; identify how the EWA service will be provided and provide the consumer with a written or electronic document explaining the consumer’s rights and fully disclosing all fees; inform the consumer of any changes to terms and conditions of EWA services before the changes are implemented; provide proceeds to a consumer by means that were mutually agreed upon by the provider and consumer; comply with all local, state, and federal privacy laws; explain the notices that consumers will receive when they participate; and describe how repayment will be managed.
Providers are prohibited from: sharing fees received from or charged to a consumer for EWA services; charging interest for the failure to repay outstanding fees; reporting information about the consumer’s inability to repay outstanding fees to a consumer credit agency or debt collector; requiring a consumer’s credit report or credit score to determine a consumer’s eligibility for EWA services; accepting payment from a consumer for outstanding fees via credit card; and attempting to compel repayment of outstanding fees via lawsuit or debt collection.
MONTANA
An EWA product is not considered a consumer loan under state law, so long as the EWA product is fully non-recourse; does not condition an income-based advance on any interest, fees, or other consideration or expenses; and limits income-based advances to income already earned by the consumer.
NEVADA
Nevada was the first state to enact EWA legislation. EWA providers must be issued a license by the Nevada Commissioner of Financial Institutions to engage in business in the state.
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 users 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.
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, or any other penalty for failure to pay outstanding proceeds, fees, voluntary tips, gratuities, or other donations; or report any information about the user regarding the inability of the provider to be repaid outstanding proceeds, fees, voluntary tips, gratuities, or other donations to a consumer agency or debt collector.
SOUTH CAROLINA
EWA providers are required to register with the South Carolina Department of Consumer Affairs. An EWA provider must: develop and implement policies and procedures to respond to questions raised by employees and address complaints from employees in an expedient manner; offer employees at least one reasonable option to get EWA proceeds at no cost and clearly explain how to elect that no-cost option; provide employees with a written paper or electronic document before providing EWA services that is in a font and uses language that is easily understood by a layperson that informs employees of the terms and conditions, clearly describes how the employee may use EWA services at no cost, lists a phone number or website that employees can use to submit complaints, and discloses any fees that may be imposed by the provider; inform employees of any material changes to the terms and conditions of EWA services before implementing the changes, using a font and language easily understood by a layperson; and allow employees to discontinue EWA services at any time without penalty.
WISCONSIN
EWA providers, including providers not physically located in Wisconsin, may not provide EWA services in Wisconsin unless the provider has been issued a license by the Wisconsin Department of Financial Institutions. Providers must offer the consumer (employee) at least one reasonable option to obtain the proceeds at no cost to the employee. Providers must clearly explain how to elect the no-cost option. EWA providers must develop and implement policies and procedures to respond to questions raised by employees and address complaints in a timely manner. Employees must be allowed to cancel EWA services at any time, without incurring a cancellation fee or penalty imposed by the provider.
Need More Information?
To learn more about a specific state’s laws, regulations, or guidance, be sure to check out PayrollOrg’s Guide to State Payroll Laws, Table 2.10 – Earned Wage Access and Guide to Successful Electronic Payments (free for members).
Lia Coniglio, Esq., is Managing Editor of PayState Update and Senior Manager of State Payroll Information Resources for PayrollOrg
