US expands On-Demand Pay framework

By Vriti Gothi

The US has introduced a new law setting clear rules for On-Demand Pay services, making Louisiana the latest state to establish guidelines for flexible wage access.

Signed into law on 25 June 2025, Louisiana Act 496 introduces statutory protections for workers who choose to access earned wages before their scheduled payday, while confirming that providers operating within the law’s requirements will not be treated as lenders under state rules. The legislation will come into effect on 1 August 2025.

The bill passed with unanimous support, clearing the State Senate by 37 votes to nil and the House of Representatives by 93 votes to nil — an indication of broad cross-party backing for measures aimed at expanding workers’ financial options and safeguarding consumer interests.

On-Demand Pay, also known as Earned Wage Access, allows employees to draw down a portion of wages they have already earned, providing an alternative to overdrafts, payday loans or other short-term credit options that can carry significant fees or interest rates. Supporters argue that this model can help improve financial stability for workers while enabling employers to offer benefits that support recruitment and retention in a competitive labour market.

Jared DeMatteis, Chief Legal and Strategy Officer at DailyPay, said, “Louisiana has joined 10 other states–four of them just this year–in implementing clear On-Demand Pay regulations that allow employers, employees, and providers to thrive. DailyPay applauds bill author Representative Vincent St. Blanc, as well as Representative Kim Carver and Senator Beth Mizell, for their leadership, and to the entire Louisiana legislature for passing this important bill into law. This new law will empower employees with real-time access to their earned wages and help businesses build stronger, more engaged workforces.”

The passage of Act 496 makes Louisiana the eleventh state in the US to adopt dedicated rules for On-Demand Pay, reflecting growing policy interest in how emerging financial technologies intersect with consumer protection and employment rights. Industry observers expect more states to consider similar measures as demand for flexible pay solutions continues to expand.