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Woman sues McDonald's franchisee for payroll debit

She spent her days serving up Happy Meals, but when it came time to get paid, Natalie Gunshannon says a local McDonald's franchisee gave her an unhappy deal.

The Shavertown McDonald's forces workers to be paid only one way: with a payroll debit card that burdens workers with hefty fees to obtain their hard-earned cash, according to a lawsuit filed Thursday on behalf of Ms. Gunshannon and other McDonald's workers.

Ms. Gunshannon, 27, Dallas Twp., and an untold number of current and former employees had no option to receive a traditional paycheck or get paid by direct deposit, she and her attorneys said in the class-action against franchise owners Albert and Carol Mueller of Clarks Summit.

Ms. Gunshannon, who worked at the Shavertown McDonald's for a month after being hired April 24, refused to activate the payroll card after reviewing the fee structure, quit the job and reached out to an attorney to see if the practice was legal.

Attorney Michael J. Cefalo of West Pittston and his law firm then drafted a class-action lawsuit against the Muellers, who own 15 other McDonald's locations throughout Northeast Pennsylvania.

Filed in Luzerne County Court, the suit accused the Muellers and their limited partnership of violating the Pennsylvania Wage Payment and Collection Act and unlawfully boosting profits with the payroll card "scheme."

The suit seeks an unspecified amount of monetary damages on behalf of employees and asks a judge to award punitive damages against the company.

Beth Dal Santo, a spokeswoman for an association of McDonald's franchisees in the region, said the Muellers had not been served with the lawsuit Thursday and would not comment.

Ms. Gunshannon said the manager of the Muellers' Shavertown location refused to issue her a paper paycheck or pay via direct deposit, saying, "We only pay on the card."

The J.P. Morgan Chase payroll card carries fees for nearly every type of transaction, according to the lawsuit, including a $1.50 charge for ATM withdrawals, $5 for over-the-counter cash withdrawals, $1 to check the balance, 75 cents per online bill payment and $10 per month if the card is left inactive for more than three months.

A spokeswoman for the McDonald's Corp., which is not named as a defendant in the lawsuit, did not respond to a telephone message and emailed questions Thursday about the company's guidelines for how its franchisees should pay employees.

Mr. Cefalo said they filed the lawsuit on behalf of all current and former employees who were paid with payroll cards without being given the option of receiving their wages in cash or via a check. State law, he said, requires wages be paid in "lawful money" or with a check.

The definition of "lawful money" is unclear, but the state Department of Labor and Industry and state banking regulators have endorsed payroll cards as a legal form of wage payment, according to the American Payroll Association, an industry trade association.

A spokeswoman for the state Department of Labor and Industry said Thursday the department was researching the matter.

Ms. Gunshannon, who estimated the company owes her about $200, said she pursued the lawsuit because she thinks workers should have a choice in how they are paid.

"I tried to work with the company. They refused. I tried the main office in Clarks Summit. They refused," Ms. Gunshannon said. "I never activated the card. I refused the fees. I just want it to be fair."

by Anonymousreply 5307/01/2013

I wonder if this will be thrown out since she quit. It could be argued that she sought remedy by quitting employment; therefore, she has no right to sue.

by Anonymousreply 106/16/2013

She has a month's salary tied up in an account she has to pay fees to access, R1.

It seems fairly obvious the McDonald's franchisees are getting a kickback from Chase for the payroll debit account.

by Anonymousreply 206/16/2013

I understand R2. I am just certain this is somehow going to be HER fault in the eyes of the law. Yes, I am that cynical. We have already had the courts rule that no American has a right to a job; so, I can imagine that the courts will rule that the employer can use any payment option he/she wants.

by Anonymousreply 306/16/2013

Are they hiring?

by Anonymousreply 406/16/2013

R1 Whether she quit is irrelevant. A person is still entitled to be paid for the time they worked.

by Anonymousreply 506/16/2013

Wow, I hope she wins. That is totally shitty. Making someone PAY to access the money they have already earned! It seems like an impairment of contracts OR an unlawful taking of money (or property) OR an out and out theft of services. SOMETHING should stick. The fees she is charged should be charged back against the fee she must pay to access her pay to create a "wash" of sorts. In other words, she should be compensated for ANY fee she must pay to access her pay. Otherwise, she is being underpaid for work performed.

by Anonymousreply 606/16/2013

R5, really? How about all of the companies that threaten to withhold pay unless your sign some document before you leave. If the employee was entitled to that money without restriction, the employees could not blackmail an employee in that manner.

by Anonymousreply 706/16/2013

Oh, and on the subject of things that are unfair, but perfectly legal. In order to get a refund from the LIRR, there is a 10.00 fee. Even if it is their fault, you have to pay 10.00 to get your money back.

by Anonymousreply 806/16/2013

[quote]If the employee was entitled to that money without restriction, the employees could not blackmail an employee in that manner.

Ok, I read that four times and still can not figure out what you are saying there.

by Anonymousreply 906/16/2013

R9 What, you don't have your Little Orphan Annie decoder glasses ;-). Sorry, fingers faster than the brain.

If the employee was entitled to that money without restriction, the employer could not blackmail the employee in that manner.

by Anonymousreply 1006/16/2013

Ok R10 That makes sense. The employer does it because they know the employee knows no better. But there are ways around it. One call from the Labor Board can clear things up pretty fast.

by Anonymousreply 1106/16/2013

Unbelievable. I am glad this woman is suing and I hope she wins.

by Anonymousreply 1206/16/2013

We need a social uprising against the banks and capitalist exploiters.

by Anonymousreply 1306/16/2013

There really is no situation when an employer can legally withhold or reduce earned wages - not to mke you sign something, not to make you pay for equipment - nothing. I think this employee will win; they are effectively reducing their pay to below minimum wage for no reason.

And whoever noted there is likely some kickback from chase or financial consideration elsewhere is dead on. I've never seen that level of fees tied to a pay card. And I've never seen pay cards compelled that don't also give the employee direct deposit - because as far a the employer is concerned, dd or pay cards coast the same and take the same effort to establish. There is no business reason to require a specific card or block dd.

by Anonymousreply 1406/16/2013

[quote]I've never seen that level of fees tied to a pay card.

Agree. Its outrageous. If a bank offered debit cards with those sorts of fees, no one would want one.

by Anonymousreply 1506/16/2013

Hope she wins. How these people can live with themselves knowing they skimmed off of poor people is beyond me.

by Anonymousreply 1606/16/2013

You can make certain things CONDITIONS OF EMPLOYMENT, take them or leave them BEFORE you hire an employee. They could be required to sign a covenant not to compete (which R10 was inarticulately (sorry) trying so hard to explain.) Once you change the terms of an employment contract ONCE the employee has been hired under that contract, though, any material change must be accompanied by adequate consideration. It's all very "legal sounding" stuff that can get murky real quick. What one cannot do is fuck with someone's pay without adequate consideration. Less money (however that is constructed) must mean some sort of benefit to make up the difference. Contracts can become unconscionable with too many changes made. Employment-at-will does not mean that employers can screw people out of their EARNED pay. And if they try it, they can run afoul of unfair business practices and inequitable acts that violate the Labor Act (FLSA) on federal and state levels.

by Anonymousreply 1706/16/2013

When McDonald's says "You Deserve A Break Today", they were apparently talking about their employee piggybanks.

by Anonymousreply 1806/16/2013

That's nearly as bad as the KKKarda$hian KKKredit KKKard those KKKunts foisted on America a couple of years ago.

by Anonymousreply 1906/16/2013

Gross. I hope people will start to realize who is really to blame when it comes to the working person getting the shaft (hint: it's not the unions).

by Anonymousreply 2006/16/2013

Carl's Jr. started doing the same thing to their employees last year. It was either that or not get paid since they won't print checks anymore. On top of that a lot of their locations eliminated full time for all of their employees.

by Anonymousreply 2106/16/2013

I'm proud of this woman for suing.

I just recently went on UC in Pennsylvania after losing my job. Guess what I got in the mail? A Chase debit card. That's how they pay you now. But at least I was given the option of direct deposit, and I switched it over immediately. But the first payment of UC is always on the Chase card.

It's sickening.

by Anonymousreply 2206/16/2013

[quote] Carl's Jr. started doing the same thing to their employees last year. It was either that or not get paid since they won't print checks anymore.

So they couldn't do direct deposit instead?

by Anonymousreply 2306/16/2013

It should be made patently illegal to require anyone receiving benefits of ANY kind, pay or disability or unemployment, ANY kind, to have to use a debit card that requires a fee. Of any kind.

by Anonymousreply 2406/16/2013

I hope she wins big but can't help thinking there has to be some information missing from this story. The McDonald's franchisee pays all employees solely with debit cards? He doesn't offer direct deposit at all? Surely the debit cards are an alternative for those who are "unbanked."

by Anonymousreply 2506/16/2013

Upon request, the federal government will issue a MasterCard debit card called Debit Express for its VA pensions and Social Security benefit recipients. It allows for one free cash withdrawal every month, after which there is a charge for withdrawals from banks that aren't part of its very limited system.

It can be used without a fee for purchases and online bill paying, and its website suggests getting around paying cash withdrawal fees by getting cash back when making purchases.

It's not even close to the fee structure charged by the Chase payroll debit card linked to above, but I could see how it might be prohibitive for the homeless, for instance.

by Anonymousreply 2606/16/2013

Perhaps R25 overlooked this part of the article that was both quoted and linked:

[quote]The Shavertown McDonald's forces workers to be paid only one way: with a payroll debit card that burdens workers with hefty fees to obtain their hard-earned cash

by Anonymousreply 2706/16/2013

I'm sorry, but I misspoke above. The VA/SS card is called Direct Express.

by Anonymousreply 2806/16/2013

No, of course I saw that part, but I can't believe it's complete information. I would think workers are forced to be paid only one way, by debit card, *if they don't have a bank account*.

Or has it really gotten that bad for low-wage workers?

by Anonymousreply 2906/16/2013

It's obviously gotten that bad, R29. That's why the lawsuit has been filed.

by Anonymousreply 3006/16/2013

Great way to shift payroll expenses to the employee, just disgusting & should be made illegal . God I hope these companies are in violation & made to pay fines up the wazoo.

by Anonymousreply 3106/16/2013

This sounds like a job for Elizabeth Warren. She should propose legislation banning debit cards with fees for employees who want pay checks or direct deposit.

by Anonymousreply 3206/16/2013

Good for her! What a shameful racket to engage in. The reason they do this is because they know they are dealing with a population that is either very young or impoverished enough that they exist debit card to debit card and can't afford the luxury of challenging. They're being held over a barrel. I hope there's a consumer boycott of that awful couple's 15 restaurants.

If there's ever a perfect, perfect example of the 53% mooching off the 47% this is it. At least those workers will have access to healthcare once ACA rolls out.

To those who said that the suit might be dismissed because she quit her job, it's a class action on behalf of numerous as yet uncounted present and former workers who can come forward, right? Fifteen restaurants over say a five year period. That could be hundreds of workers.

by Anonymousreply 3306/16/2013

[quote] they do this is because they know they are dealing with a population that is either very young or impoverished enough that they exist debit card to debit card and can't afford the luxury of challenging.

I think that is what upsets me the most about this. They are taking advantage of people who are already at a disadvantage. To expect people to have to pay these outrageous fees for money they earned is beyond horrible.

by Anonymousreply 3406/16/2013

[bold] McD's worker sues: Don't pay by debit card [/bold]

All Natalie Gunshannon wanted was to be paid a fair wage for her work, she said.

Gunshannon, 27, of Dallas Township, worked at McDonald's Restaurant on the Dallas Highway from April 24 to May 15. When she received her first paycheck, enclosed was a Chase Bank debit card with instructions on how to use it and the fees attached.

Her future earnings would be deposited into the debit card account and she could access her money from there. Gunshannon never signed the card and when she returned to work she asked her supervisor if she could be paid by check or by direct deposit. She was told the card was the only option.

Gunshannon, a single mother of one daughter, quit her job at McDonald's and went to see an attorney, Mike Cefalo of West Pittston. A class-action lawsuit was filed Thursday in Luzerne County Court by Cefalo on behalf of Gunshannon and other employees, seeking damages, fees and costs.

The suit seeks an unspecified amount of monetary damages and asks for punitive, compensatory and liquidated damages, plus legal fees and litigation costs against the company for its "ill-gotten gains contrary to justice, equity, good conscience and Pennsylvania law."

Gunshannon said she didn't sign the card and chose to not enroll in the payroll system offered because she felt the fees would be exorbitant and actually drop her earnings below minimum wage.

She was to be paid about $7.44 per hour - her paystub didn't list her hourly rate. Minimum wage is $7.25.

According to the complaint filed, the JP Morgan Chase payroll card lists several fees, including a $1.50 charge for ATM withdrawals, $5 for over-the-counter cash withdrawals, $1 per balance inquiry, 75 cents per online bill payment and $15 for lost/stolen card.

Gunshannon said she had taken her concerns to the main office of the franchise holder - Albert and Carol Mueller, trading as McDonald's, in Clarks Summit. She was told that the card was the only option, she said.

In a statement issued by public relations coordinator Beth Dal Santo, the Muellers declined to comment on the suit, stating they had not seen a copy of the complaint.

"We value our employees and everything they do for our organization," the statement added. "We are committed to providing them the best possible work environment so they can deliver the fast, reliable service that our customers expect."

Cefalo called the payroll system "another example of corporate greed."

Cefalo said the debit card method and its fees are "squeezing the most vulnerable of our society. They make minimum wage or a little more and they squeeze money from them."

Cefalo said many more people are coming forward and telling the same stories. Pennsylvania law states employees are entitled to have a choice to be paid by check or cash, he said.

"When they work hard and earn their wages, why should they have to pay fees to collect their rightful wages?" Cefalo asked.

Gunshannon said she is looking for another job and the first question she asks is how employees are paid.

"I need to receive all the money I earn," she said.

"I can't afford to lose even a few dollars per paycheck. I just think people should be paid fairly and not have to pay fees to get their wages."

by Anonymousreply 3506/16/2013

[quote]"We value our employees and everything they do for our organization," the statement added. "We are committed to providing them the best possible work environment...

Yea sure. You just dont want to pay them for it. Dollar to donuts, the McDs is getting some sort of kick back from Chase. There is no other way why they would agree to do this unless there was something in it for them.

by Anonymousreply 3606/16/2013

What's in it for them is that they don't have to pay for a payroll service. The debit card people make their money off of the service fees charged to the employees for using the cards.

It's transferring what is normally part of an employer's cost of doing business over to the employees and making them pay for it instead.

Only a really cheap, nasty prick would do something like this. You know, a Republican.

by Anonymousreply 3706/16/2013

[quote]ollar to donuts, the McDs is getting some sort of kick back from Chase. There is no other way why they would agree to do this unless there was something in it for them.

Of course. Is this provable, though? Can the plaintiff's compel the owners of the franchises to open their books? Aside from getting some justice for the workers in getting their money back as well as punitive damages, having the company's finances revealed is just desserts. The owners are probably around the bend about this. They probably never imagined that their poor dumb (in their estimation) workers would bat an eye.

Aren't some McDonald's in PA also in trouble for misusing a visa program that allows students to come to the U.S. for work for a year? The idea is that it's supposed to be a type of cultural exchange and education program. But some Mickey D's owners are turning this into a form of indentured servitude with workers housed four or five to a room with the monies withdrawn from their paychecks for the room. They wind up with paltry paychecks for full-time work, so they don't get out much. I wonder if it's the same ownership.

by Anonymousreply 3806/16/2013

[quote] Can the plaintiff's compel the owners of the franchises to open their books?

I would guess not. I dont think you can compel a defendant to provide evidence. The state may be able to in an action different from the civil case.

by Anonymousreply 3906/16/2013

Oh no-ing myself before anyone else does about "plaintiff's"

by Anonymousreply 4006/16/2013

The other problem is that now that this revenue stream has been discovered, it will be considered a loss not to use it. I mean that it will actually be considered a loss on the books. The franchise will need to make that up somewhere. Basically the employees are screwed one way or another, because the franchise is going to make up that money.

This will also be another reason for companies to scream that the government is anti-business.

I suspect this will not end well.

And for R38, the foreign exchange scam is wide spread. We had some kids from eastern Europe who were stranded in our town because they were to work at an Rita's ice cream parlor for the summer, but the franchise folded and nobody told the kids or their families. Nobody told the kids or their families because they *pay* for the privilege of working at a minimum wage job all summer. The franchise holder didn't want to have to refund the money.

by Anonymousreply 4106/16/2013

And somehow someone will convince these people that regulating how you are paid will threaten our liberty, lead to socialism and anal sex being a mandatory field of study in kindergarten... so vote for Romeny, Palin et al...

by Anonymousreply 4206/16/2013

per the article at R35:

[quote] Cefalo said many more people are coming forward and telling the same stories. [bold] Pennsylvania law states employees are entitled to have a choice to be paid by check or cash, he said. [/bold]

by Anonymousreply 4306/16/2013

R43, per the original article:

[quote] State law, he said, requires wages be paid in "lawful money" or with a check.

[quote]The definition of "lawful money" is unclear, but the state Department of Labor and Industry and state banking regulators have endorsed payroll cards as a legal form of wage payment, according to the American Payroll Association, an industry trade association.

by Anonymousreply 4406/16/2013

Well R44, this is from the PA state website regarding labor law compliance:

[quote] The Act provides that every employer shall pay all wages, other than fringe benefits and wage supplements, due his/her employees on regularly scheduled paydays designated in advance by the employer. He/she shall pay in cash or by bank check. The employer must notifiy each employee at the time of hiring of the following: (1) time and place of payment; (2) rate of pay; and (3) amount of any fringe benefits or wage supplements to be paid to the employee, a third party, or a fund for the benefit of the employee.

by Anonymousreply 4506/16/2013

[quote]What's in it for them is that they don't have to pay for a payroll service.

They still have to pay a payroll service to process payroll taxes and other deductions. How much more would a payroll service charge to do direct deposit of their employees' paychecks instead of this scammy debit card? I suspect there was a cost to the franchise owners to set up this system, and that's why I think there's a kickback involved.

[quote]Of course. Is this provable, though? Can the plaintiff's compel the owners of the franchises to open their books?

They may not be able to compel complete financial disclosure because that might be seen as overreaching, but during the discovery process, they can probably force the franchisee to disclose all of their payroll data.

by Anonymousreply 4606/16/2013

[bold] Paid via Card, Workers Feel Sting of Fees [/bold]

A growing number of American workers are confronting a frustrating predicament on payday: to get their wages, they must first pay a fee.

For these largely hourly workers, paper paychecks and even direct deposit have been replaced by prepaid cards issued by their employers. Employees can use these cards, which work like debit cards, at an A.T.M. to withdraw their pay.

But in the overwhelming majority of cases, using the card involves a fee. And those fees can quickly add up: one provider, for example, charges $1.75 to make a withdrawal from most A.T.M.’s, $2.95 for a paper statement and $6 to replace a card. Some users even have to pay $7 inactivity fees for not using their cards.

These fees can take such a big bite out of paychecks that some employees end up making less than the minimum wage once the charges are taken into account, according to interviews with consumer lawyers, employees, and state and federal regulators.

Devonte Yates, 21, who earns $7.25 an hour working a drive-through station at a McDonald’s in Milwaukee, says he spends $40 to $50 a month on fees associated with his JPMorgan Chase payroll card.

“It’s pretty bad,” he said. “There’s a fee for literally everything you do.”

Certain transactions with the Chase pay card are free, according to a fee schedule.

Many employees say they have no choice but to use the cards: some companies no longer offer common payroll options like ordinary checks or direct deposit.

At companies where there is a choice, it is often more in theory than in practice, according to interviews with employees, state regulators and consumer advocates. Employees say they are often automatically enrolled in the payroll card programs and confronted with a pile of paperwork if they want to opt out.

“We hear virtually every week from employees who never knew there were other options, and employers certainly don’t disabuse workers of that idea,” said Deyanira Del Rio, an associate director of the Neighborhood Economic Development Advocacy Project, which works with community groups in New York.

Taco Bell, Walgreen and Wal-Mart are among the dozens of well-known companies that offer prepaid cards to their workers; the cards are particularly popular with retailers and restaurants. And they are quickly gaining momentum. In 2012, $34 billion was loaded onto 4.6 million active payroll cards, according to the research firm Aite Group. Aite said it expected that to reach $68.9 billion and 10.8 million cards by 2017.

Companies and card issuers, which include Bank of America, Wells Fargo and Citigroup, say the cards are cheaper and more efficient than checks — a calculator on Visa’s Web site estimates that a company with 500 workers could save $21,000 a year by switching from checks to payroll cards. On its Web site, Citigroup trumpets how the cards “guarantee pay on time to all employees.”

The largest issuer of payroll cards is NetSpend, based in Austin, Tex. Chuck Harris, the company’s president, says it attracts companies by offering convenience to employees and cost savings to employers.

“We built a product that an employer can fairly represent to their employees as having real benefits to them,” he said.

Sometimes, though, the incentives for employers to steer workers toward the cards are more explicit. In the case of the New York City Housing Authority, it stands to receive a dollar for every employee it signs up to Citibank’s payroll cards, according to a contract reviewed by The New York Times. (Sheila Stainback, a spokeswoman for the agency, noted that it had an annual budget of $3 billion and that roughly 430 employees had signed up for the card.)

by Anonymousreply 4707/01/2013

(cont'd)

For Natalie Gunshannon, 27, another McDonald’s worker, the owners of the franchise that she worked for in Dallas, Pa., she says, refused to deposit her pay directly into her checking account at a local credit union, which lets its customers use its A.T.M.’s free. Instead, Ms. Gunshannon said, she was forced to use a payroll card issued by JPMorgan Chase. She has since quit her job at the drive-through window and is suing the franchise owners.

“I know I deserve to get fairly paid for my work,” she said.

The franchise owners, Albert and Carol Mueller, said in a statement that they comply with all employment, pay and work laws, and try to provide a positive experience for employees. McDonald’s itself, noting that it is not named in the suit, says it lets franchisees determine employment and pay policies.

Some employers and card issuers say that the payroll cards are useful for low-wage workers who do not have bank accounts. They also say that the fees on the cards are usually lower than those associated with check-cashing services, which are often the only other option for people who do not have bank accounts.

“An unbanked employee is likely to be subject to a check-cashing fee when they try to cash a payroll check,” said Nina Das, a Citigroup spokeswoman. She said that “someone cashing a payroll check for $500 would end up paying $15 at a 3 percent check-cashing fee.”

This population — people who tend to use few, if any, bank services — is swelling. About 10 million households in the United States do not use a bank at all, up from nine million four years ago, according to estimates from the Federal Deposit Insurance Corporation. And 24 million households that do have a bank account still use expensive financial services like prepaid cards, the agency said.

For banks that are looking to recoup billions of dollars in lost income from a spate of recent limits on debit and credit card fees, issuing payroll cards can be lucrative — the products were largely untouched by recent financial regulations. As a result, some of the nation’s largest banks are expanding into the business, banking analysts say.

The lack of regulation in the payroll card market, while alluring for some of the issuers, can potentially leave cardholders swimming in fees. Take the example of inactivity fees that penalize customers for infrequently using their cards. The Federal Reserve has banned such fees for credit and debit cards, but no protections exist on prepaid cards. Cards used by more than two dozen major retailers have inactivity fees of $7 or more, according to a review of agreements.

Some employees can also be hit with $25 overdraft fees, called “balance protection,” on some of the prepaid cards. Under the Dodd-Frank financial overhaul law, banks with more than $10 billion in assets are barred from levying overdraft fees on customers’ checking accounts.

Many fees are virtually impossible to dodge, some employees say. A Victoria’s Secret employee, Bintou Kamara, for example, said it cost her $1.50 just to transfer money from her Citi payroll card to her checking account.

“I just make such little money that it seems like a lot to pay just to get access to it,” said Ms. Kamara, 23, who works as a sales clerk in New York.

Naoki Fuji, a policy associate at Retail Action Project, an advocacy group for retail workers, said, “These are people who can least afford to fork over huge fees.”

On some of its payroll cards, NetSpend charges $2.25 for out-of-network A.T.M. withdrawals, 50 cents for balance inquiries via a representative, 50 cents for a purchase using the card, $5 for statement reprints, $10 to close an account, $25 for a balance-protection program and $7.50 after 60 days of inactivity, according to an April presentation by the company reviewed by The Times.

Patrick Brown, NetSpend’s senior vice president, said the company was “passionate that consumers can access their wages free of charge,” providing an A.T.M. navigator to help employees find fee-free cash machines.

by Anonymousreply 4807/01/2013

(cont'd)

Some large retailers, like Home Depot, Wal-Mart, Walgreen and Limited Brands, the parent company of Victoria’s Secret, say they let employees choose whether they will receive their wages through direct deposit or a prepaid card, along with checks in some cases.

In other cases, employees say that while they do get some free cash withdrawals at certain A.T.M.’s, it is difficult to find the right machines in their neighborhoods. Ms. Das of Citigroup said that its “payroll card holders have access to over 27,000 A.T.M.’s across the country.”

Problems arise, though, when employers mandate the use of prepaid cards. In 25 states, employers are allowed to forgo paper checks and offer direct deposit or payroll cards; in the remaining states, regulations are less clear and employers are taking a risk by not offering a paper-check option, too, according to research by Madeline K. Aufseeser, an analyst at Aite. It is unclear how many employers offer payroll cards.

For low-wage employees, the fees can lead to unusual solutions.

Krystal McLemore, 22, makes $7.65 an hour at a Taco Bell in St. Louis. She said she was told to sign up for a payroll card. (Taco Bell says it “offers direct deposit and a voluntary option of payroll cards as an added convenience” for employees.)

But she grew tired of being charged $1.75, in addition to the A.T.M.’s fees, to withdraw cash. After a tip from a co-worker, Ms. McLemore realized she could reduce her charges if she took out all her wages once a month. Now, supplied with one of the most modern banking products, Ms. McLemore has a decidedly old-fashioned way of handling her pay: it is stacked in a shoe box in her closet in $10s and $20s.

“It costs too much to get my money,” she said.

by Anonymousreply 4907/01/2013

"a calculator on Visa’s Web site estimates that a company with 500 workers could save $21,000 a year by switching from checks to payroll cards."

Nickeled and dimed. And everyone wins but the worker.

by Anonymousreply 5007/01/2013

Just saw one of those ambulance chaser commercials, did you work at one of these McDonalds, and was paid with a Payroll card? They list all 16 owned by OP's story. Someone's looking for a class action suit.

by Anonymousreply 5207/01/2013

Well, if it takes an ambulance chaser to stop this practice...

by Anonymousreply 5307/01/2013
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