Nevada approves wage access regulations | Orrick, Herrington & Sutcliffe LLP

On June 20, the Nevada Secretary of State approved Regulation NAC 604D, LCB Docket No. R096-23 (the Regulation), issued by the Nevada Department of Business and Industry, Division of Financial Institutions, which establishes regulations implementing SB 290 (the Act) relating to access to work-related wages (described here on InfoBytes).

The Regulation set out the Commissioner’s interpretation of the term “indirectly” used in the definition of “employer-integrated payroll services” in the Act. As explained by the legal counsel in the executive order brief, “SB 290 defines employer-integrated payroll access services as providing a user with access to earned but unpaid income determined based on employment, income, or attendance data obtained directly or indirectly from the employer.” In this context, the Executive Order provided that data obtained “indirectly” from an employer means “verified employment, income, or attendance data of the user that is:” (i) “Obtained from an integrated system”; (ii) “Not obtained directly from the employer’s system”; and (iii) “Not obtained directly from the user.” The Executive Order further provides that an “owner” was “a person having an ownership interest of at least 10 percent or more in an applicant for a license as a business entity provider.” The Executive Order also clarified that providers are prohibited from charging any cancellation fee.

The regulation established fees of $1,000 for (i) the initial application for a license; (ii) the initial issuance of a license as a supplier; (iii) the annual renewal of such license; and (iv) the reinstatement of an expired license. The regulation further provided that each application for a license submitted by a supplier that is a business entity must be accompanied by a list of each person who has an ownership interest in the applicant.

Under the regulation, licensees will be required to report to the state certain activity-based information, including, but not limited to, (i) the total number and value of fees and expedited delivery fees paid by users during the prior year; (ii) the number of users with delinquent revenue at the time of reporting and the value of such delinquent revenue; (iii) the total number of requests for refunds of overdraft or NSF fees during the prior year; and (iv) voluntary tips received. Licensees will also be required to file audited financial statements by April 15 of each year (or, if unavailable, unaudited financial statements by April 15, followed by audited financial statements by June 30 of the same year). Licensees must maintain records for at least six years and may not engage in misleading advertising. With respect to oversight, the ordinance establishes an hourly fee of $75 to be charged by the Commissioner for any oversight, examination, audit, investigation, or hearing conducted pursuant to the provisions of the Act, provided that the Commissioner may revoke or suspend licenses for any violations and has broad authority to request information during examinations or investigations.

This regulation will enter into force on July 1.