Lisa Madigan: Lawmakers should eliminate unfair fees on ‘payroll cards’
In the same week that the General Assembly approved a referendum on the November ballot asking voters if the state’s minimum wage should be raised, a bill I proposed to help low-wage workers right now could be in jeopardy.
House Bill 5622 would put protections in place for workers who receive their wages on “payroll cards,” which have features similar to prepaid debit or gift cards and are used by a growing number of big retail companies and fast-food chains to pay hourly workers.
Employees can use the cards to make ATM withdrawals or purchases. But there’s a problem. Payroll cards, unlike gift cards, are loaded with fees and fines that unjustly penalize workers. The fees include a monthly $5 account inactivity fee; 50-cent fees to make purchases, check the card’s account balance or for declined transactions; and fees to receive monthly account statements.
For low-wage earners, these fees can quickly add up and make a costly dent in what they ultimately take home each pay period.
Under current Illinois law, the money consumers receive on a gift card is actually better protected than the wages that low-income workers receive on payroll cards.
The legislation I proposed would close that gap in the law by eliminating many of the unfair, excessive fees on payroll cards.
Working with Sen. Kwame Raoul, D-Chicago, and Rep. Art Turner, D-Chicago, we’ve made significant progress in negotiating the bill for passage. But now, in the 11th hour, the banks are lobbying heavily to persuade legislators to oppose it. The banks clearly want to preserve their profits from payroll cards.
Voters will have their say at the polls in November on whether the state should raise the minimum wage. In the meantime, the General Assembly has an opportunity to do something right now to help low-income workers and their families.
Stop forcing people to pay to receive their pay, and vote in support of HB5622.