By FOCUS, a Leonine Business
Over the past several years, earned wage access (EWA) programs have emerged as a modern solution for workers seeking quicker access to their wages. These programs allow employees to receive a portion of their paycheck before their scheduled payday, providing a flexible alternative to payday loans or overdraft fees.
EWA services can be offered directly by employers or through third-party providers. The third-party model typically includes either a one-time fee or a subscription service with solicited “tips” from users. In some cases, workers may be charged more for receiving funds faster. In an employer-provided earned wage access program, employers often absorb the cost to provide these services as an employee benefit. Consumer advocates are concerned about hidden fees and argue that EWA programs should be treated and regulated like traditional loans.
Some states, like California and Connecticut, now classify EWA products as loans, bringing them under state lending laws. Conversely, Nevada, Kansas, Missouri, Wisconsin and South Carolina have passed laws classifying earned wage access programs as distinct financial products or cash advances These states have focused on licensing standards, tip solicitation restrictions, and repayment guidelines for both employer-based and third-party models.
In current legislative sessions, at least 50 EWA-related bills have been introduced across 26 states. Most recently, Arkansas HB 1517/Act 347 was signed into law by Republican Governor Sarah Huckabee Sanders on March 20. Effective August 4, the new law requires earned wage access service providers to comply with specific consumer protection measures, including clear disclosures of fees, ensuring at least one no-cost option for consumers and prohibiting practices such as sharing fees with employers or using credit reports to determine eligibility.
As states weigh how to balance innovation with consumer protection, EWA remains largely targeted at low-wage and hourly workers, those most vulnerable to unexpected expenses between paychecks. Whether treated as a distinct financial product or as a loan, the future of earned wage access will be shaped by how legislatures define its role in the broader landscape of financial services. FOCUS will continue to monitor state-level efforts to regulate earned wage access programs across the country.
By Will Beacom 3/24/25
