Indiana’s New Earned Wage Access (EWA) Law: What Employers and Providers Need to Know

At a Glance

• Employers who directly offer EWA are exempt from licensing but should still stay informed about regulatory and consumer protection expectations for EWA services to avoid potential compliance and legal ramifications.
• EWA providers must adapt to Indiana’s licensing, reporting and fee disclosure requirements. The explicit exclusion of EWA services from lending laws creates regulatory clarity but imposes nuanced compliance obligations, especially for providers operating in multiple states with varying rules.
• Indiana’s law is part of an increasing trend toward state-by-state regulation and a move away from treating EWA services as traditional lending. However, with states like Maryland and California taking different stances, multistate EWA providers and employers face a patchwork of compliance responsibilities.

Indiana’s recent enactment of the Indiana Earned Wage Access Act (House Enrolled Act 1125) positions Indiana as one of the leading states to allow earned wage access (EWA) services, and establishes a comprehensive regulatory framework for EWA providers. The new law takes effect January 1, 2026, and Indiana joins a small group of other states in enacting laws that specifically regulate EWA services.

What Is Earned Wage Access?

EWA services allow employees to access a portion of their earned wages before their scheduled payday, offering flexibility and the potential to avoid high-cost borrowing options. There are two main EWA models:

• Employer-Integrated: Providers access real-time payroll or attendance data directly from employers.
• Consumer-Directed: Providers determine workers’ earned but unpaid income based on information reported by workers themselves. 

EWA services differ from payday loans, which are short-term personal loans, since employees are using money for hours they’ve already worked. 

Key Provisions of Indiana’s EWA Law

Indiana’s new law creates guardrails and protections for EWA providers and services, including the following.

Licensing & Reporting

EWA providers must obtain a license from the Indiana Department of Financial Institutions (DFI), submit quarterly reports and retain records for at least two years. Employers offering EWA directly to their employees, as well as federally insured depository institutions (such as banks and credit unions), are not subject to the licensing requirement. According to recent guidance from the Indiana DFI, the application process will be available via the Nationwide Multistate Licensing System beginning on October 1, 2025. 

Fee Restrictions & Tip Transparency

EWA providers are required to offer at least one no-cost option and transparent fee disclosures. EWA providers may not set fee- or tip-based services as the default for workers. The law also caps the fee that can be charged for EWA services. All tips or gratuities must be clearly disclosed as voluntary. Any fees or voluntary tips or gratuities cannot be shared with employers. 

Consumer Protections

The law prohibits EWA providers from charging late fees, interest or other penalties for nonpayment. EWA providers also cannot use outbound collection calls, lawsuits or third-party collectors to recover unpaid proceeds or fees, except where EWA services were obtained by fraud or unlawful means. Indiana DFI is also authorized to impose a civil penalty up to $10,000 for each violation of the EWA law.

Data & Advertising Limits

EWA providers can only use location data to verify Indiana residency, and may not send unsolicited advertisements unless users have opted in.

Indiana’s EWA Law in the National Context

Indiana’s decision to regulate EWA comes amid a wave of legislative action across the country. With this law, Indiana joins a small group of states — including Arkansas, Utah, Kansas, Missouri, Nevada, South Carolina, Wisconsin and most recently Maryland — that have enacted EWA-specific legislation in just the past two years. While this reflects a growing trend of states recognizing EWA as a distinct financial tool, it also highlights potentially divergent regulatory approaches among states. For example, Indiana’s EWA law explicitly provides that EWA services — when provided in accordance with the law — are not considered loans or other forms of credit, separating Indiana from states like California, which treat EWA as a form of lending with different restrictions. 

Implications of the EWA Law & Looking Forward 

Effective January 1, 2026, Indiana’s EWA law positions the state at the forefront of this evolving industry, providing a regulatory model that addresses consumer protection and financial innovation. As more states adopt similar — or contrasting — laws, employers and EWA providers will need to stay vigilant and adapt to ongoing regulatory changes. As this law goes into effect, employers and EWA providers should consider the following implications.

For Employers

Employers who directly offer EWA are exempt from licensing but should still stay informed about regulatory and consumer protection expectations for EWA services to avoid potential compliance and legal ramifications. The law also states that limitations on an EWA provider’s collection efforts from workers does not preclude the EWA provider from pursuing any available remedies against an employer for breach of the employer’s contractual obligations to the EWA provider. Employers who engage a third-party EWA provider to integrate with the company’s payroll system will want to ensure compliance by the EWA provider and engage legal counsel when partnering with an EWA provider.

For EWA Providers

EWA providers must adapt to Indiana’s licensing, reporting and fee disclosure requirements. The explicit exclusion of EWA services from lending laws creates regulatory clarity but imposes nuanced compliance obligations, especially for providers operating in multiple states with varying rules.

For the Broader Industry

Indiana’s law is part of an increasing trend toward state-by-state regulation and a move away from treating EWA services as traditional lending. However, with states like Maryland and California taking different stances, multistate EWA providers and employers face a patchwork of compliance responsibilities.