Update Applicable to:	Effective date
All covered entities	November 21, 2024

What happened?

On May 21, 2024, South Carolina Governor Henry McMaster signed into law the Earned Wage Access Services Act (the “Act”), which will require earned wage access (“EWA”) providers to register annually with the state’s Department of Consumer Affairs and meet certain requirements.

What are the details?

Key Bites:

• To offer an EWA in South Carolina, a provider must be registered. There are exceptions to this registration.

• As part of that registration, providers must comply with some requirements.

• EWAs are not considered loans or wage assignments under the Consumer Protection Code, and neither fees nor tips are considered loan finance charges.

• Empowers the Department of Consumer Affairs to issue cease-and-desist orders, assess administrative penalties, require consumer refunds, and deny, revoke, or suspend a provider’s registration.

• The annual renewable period runs from May 1 until June 30.

• Providers adhering to the Act’s regulations are not classified as lenders under the Consumer Protection Code, nor are they considered deferred presentment providers or entities involved in money transmission business.

• Contains annual reporting requirements, which must be completed on or before June 30 of each year.

• EWAs based on receipt of government benefits or public assistance likely do not qualify for exemptions from state laws.

• The Act defines two Earned Wage Access (EWA) structures:
  • Consumer-Directed Wage Access Services: Eligibility is based on the consumer’s representations and the provider’s determination of the consumer’s earned but unpaid income.
  • Employer-Integrated Wage Access Services: Eligibility is based on employment, income, and attendance data obtained from an employer.
  • Both structures include “earned but unpaid income” as a key component, which must be earned or accrued in exchange for the consumer’s services provided to an employer.

• Providers also will be subject to several substantive requirements: Requirements and Limitations

Business Considerations

• Employers should prepare for the Act’s implementation and should ensure that their practices align with the Act’s provisions to avoid penalties, consumer refunds, and possible denial, revocation, or suspension of their registration. Providers should swiftly assess their systems, procedures, and disclosures to ensure they align with South Carolina’s new regulations.
• Employers should be aware and notice that a common regulatory pattern emerges. 
• Employers should familiarize themselves with the Act’s provisions, which require Earned Wage Access (EWA) providers to register annually with the state’s Department of Consumer Affairs and meet certain requirements. They should also be ready to register once the department releases a registration form.
• Employers wishing to offer either of these EWAs in SC should ensure they register under the Act unless they fall into an exception.
• Employers should ensure compliance with all local, state, and federal privacy and information security laws since this law affects compliance with others, but not limited to, the Electronic Fund Transfer Act.
• Employers should be aware that the department has the power to impose penalties and take disciplinary actions against providers that violate the law. They should also note the requirement for providers to submit an annual report to the department.

Source References

• Earned Wage Access Services Act (the “Act”)

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