DailyPay sues New York to thwart threatened lawsuit over worker pay product

Jonathan Stempel

Mon, Apr 7, 2025, 8:58 AM 2 min read

By Jonathan Stempel

NEW YORK (Reuters) - DailyPay, which offers a merchandise that lets workers cod paychecks faster successful speech for a fee, sued New York Attorney General Letitia James connected Monday to thwart a imaginable suit claiming the merchandise is an amerciable loan.

In a ailment filed successful Manhattan national court, DailyPay said James' menace stemmed from her probe begun successful 2022 into the "earned wage access" industry, arsenic portion of an overbroad effort to state on-demand wage products illegal.

DailyPay said its merchandise "does not make a indebtedness obligation" for workers trying to span the spread betwixt payroll schedules and erstwhile bills travel due, due to the fact that they are not required to repay thing adjacent if employers neglect to marque payroll.

The New York-based fiscal exertion institution said its lone interest is simply a $3.49 complaint to expedite wealth transfers, comparable to fees for ATM withdrawals and Venmo transfers.

"It's disappointing that the Attorney General's bureau decided to preempt the measure pending successful the authorities legislature and effort to instrumentality this invaluable work away," Jared DeMatteis, DailyPay's main ineligible and strategy officer, said successful a statement.

"The actions taken by the Attorney General's bureau suggest that it prefers consumers to trust connected indebtedness sharks oregon wage higher overdraft and precocious fees," DeMatteis added.

James' bureau had nary contiguous comment.

DailyPay said James' statement not to writer expired connected April 4. The suit seeks a declaration that DailyPay does not interruption New York user extortion and usury laws.

Many U.S. states are expected to proceed adjacent monitoring of the fiscal services manufacture adjacent arsenic the Trump medication curbs oversight astatine the national level.

Founded successful 2015, DailyPay said much than 5 cardinal employees person entree to its products, which besides see prepaid Visa debit cards, recognition monitoring and fiscal counseling.

The lawsuit is DailyPay LLC v James, U.S. District Court, Southern District of New York, No. 25-02849.

(Reporting by Jonathan Stempel successful New York; Editing by Chizu Nomiyama)