On-demand pay is growing rapidly as businesses adopt it to pay their employees across the country. It is considered a trustworthy payment solution for employers and employees. There are several state and federal regulations companies must follow to remain in compliance.
Here’s an overview of compliance that ensures on-demand pay is safe.
State and federal laws
While not every state has an on-demand payment law in place, many do. California and New Jersey have enacted laws, with New York, North Carolina, South Carolina, Georgia, Nevada, and Utah are also “experimenting” with legislation.
There are federal regulations too. The Consumer Financial Protection Bureau has published guidance for on-demand pay companies. Companies must:
- Send the payment to the account the employee wants.
- Not charge fees for opening an account, usage fees, or payment delivery.
- Prepaid cards connected to the account must be available for use at multiple merchants and be issued on major brand networks.
- Provide a free and accessible way to obtain the money.
- Employees must be notified about there being no fees for the account, including overdraft fees. Companies also must not participate in debt collection or assess the credit risk by reviewing credit information.
Compliant on-demand pay for your business
Edenred’s AnytimePay solution meets compliance requirements and is an excellent option for companies looking to add on-demand pay to their benefits list. Payments are processed during each pay cycle, and there’s no debt collection, credit risk assessment or other activities that are not allowed for on-demand payments providers.
Employees can request money they’ve earned by logging into our app. They can choose an amount up to their limit. The payments get processed within the same pay cycle and deducted from employees’ paychecks.
If you’d like to offer your employees on-demand pay, schedule a meeting with us today. We’d be happy to discuss your options with you.