Electronic Payroll Debit/Credit Cards for Payment of Wages

Pursuant to the Illinois Wage Payment and Collection Act, 820 ILCS 115/1 et seq., the use of electronic payroll debit or credit cards as a method of paying employees their wages and final compensation is acceptable in Illinois but only if the following factors are met:

• The employee must voluntarily agree to the use of a payroll card as the method the employee chooses to receive his or her wages and/or final compensation.  It is not voluntary in fact if the employee is given to understand or led to believe that it is a condition for hire or his or her present working conditions or continuance of his or her employment would be adversely affected by non-acceptance.  An employer cannot mandate the use of a payroll card.
• If an employee voluntarily chooses to accept the use of a payroll card for the payment of wages and/or final compensation, the employer must disclose in writing to the employee all fees, penalties and costs associated with the use of the payroll card.  The employee must be able to deposit and/or obtain the full monetary value on the payroll card without discount.
• If the employee chooses the payroll card as a method of payment, the employer is required to provide an itemized statement of all hours worked, rate of pay, and all lawful deductions made from the wages and/or final compensation for each pay period.
• An employee can revoke his or her authorization of the payroll card as a method of payment at any time and the employer is obligated to provide to the employee another alternative method for the payment of wages and/or final compensation.
• An employer is not permitted to offer employees only the choice between two voluntary methods of payment. Because payment by either payroll card or direct deposit must be voluntary, an employer offering either or both of these payment methods must also provide an additional choice of payment by cash or check, in accordance with 820 ILCS 115/4.
• An employer may not use a payroll card program that charges fees for point of sale transactions, the application, initiation, loading of wages by the employer, or participation in the payroll card program. Fees for account inactivity may be assessed following one year of inactivity. The payroll card must offer the employee a declined transaction, at no cost to the employee, twice per month. Commercially reasonable fees, limited to cover the costs to process declined transactions, may be assessed on subsequent declined transactions within that particular month.
• The payroll card or payroll account may not be linked to any form of credit including, but not limited to, overdraft fees or overdraft service fees, a loan against future pay, or a cash advance on future pay or work not yet performed.

Read more about Fair Labor Standards.

For more information on Forms of Payment, view our Frequently Asked Questions page​.

To see all of the provisions applicable to payroll cards, please see Section 14.5 of the Illinois Wage Payment and Collection Act​.