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McDonald's Worker Says She Was Required to Receive Pay on Fee-Laden Debit Card
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SamH
Guest
If she had her own bank account she would not have had to use the bank card.
If she gets paid weekly or monthly the $10 inactivity fee never applies. As for ATM fees, I’m 47 years old and have never used an ATM in my life.
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SouthCatholic
Guest
Read it again SamH…
She had a bank account at a credit union and they refused to let her direct deposit to that account.
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Presurmksdimnds
Guest
Bank accounts also charge fee’s. I can’t find any ‘free’ checking accounts that have no minimum balance.
I hope this works for her, and I hope it sets some precedence for other debit card programs, such as ADP (Total Pay Card). It is a huge inconvenience and costs ME money just to get paid. I worked for you - I want my money. All of it minus the tax. I shouldn’t have to pay to receive money I’ve earned.
Many companies are ditching traditional payroll for these automatic debit cards (part of phasing out cash? IDK). It makes me very uncomfortable having my money go thru a third party before it ever gets into my hands. I simply don’t trust banks and make way too much of a meager income to afford any mishaps with my money.
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Presurmksdimnds
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Even if she didn’t have a bank account, I think the bigger point is this puts us in a situation where we HAVE to either have a bank account, or, an account with the bank that the debit card is drawn on. With ADP it’s Metabank.
This program forces you into a business relationship with a bank, why must I? Banks don’t have the best track record and quite frankly I don’t want to be a customer to any of them.
Mandated health insurance…mandated banking…
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ringil
Guest
You routin’ for the bank there Sam? WOW, just wow.
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SamH
Guest
I’m for the employer against an employee that is trying to bilk the system.
Just wondering - how many people get their wages in cash as this lawyer claims is their “right”.
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SamH
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Nowhere does it say her employer refused.
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stinkcat_14
Guest
Just how is this employee trying to bilk the system?
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SamH
Guest
She freely agreed to work for the employer, I’m sure the issue of wages and payroll process came up. If she didn’t like it she was free to walk out the door and not take the job. Instead she takes the job then sues the employer because she didn’t like it.
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stinkcat_14
Guest
So everyone who sues their employer is trying to bilk the system? If the law does give the right to be paid by check, should she not be free to demand it? Or are employer’s exempt from the law?
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markomalley
Guest
There are always two sides to every story. We’ve only heard the plaintiffs side.
It has been decades since I’ve worked in a job where I haven’t had to have a bank account so that my check could be directly deposited. So, in my mind, an electronic deposit requirement is reasonable. Particularly with how modern payroll systems work.
And so, I can see this as an option if the employee did not have a bank account or had an account of some type that did not accept electronic funds transfers.
Check cashing fees at grocery stores or check cashing stands can be onerous, too, so this is not all bad.
Having said that, I would have a hard time believing that they couldn’t do an EFT.
Unless thus McDonald’s franchisee uses Chase as their bank, there would be no advantage to them to do so.
But time will tell.
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agnes_therese
Guest
No, the story says McDonald’s only offers bank direct deposit to managers and assistant managers. That’s ridiculous. If they’re trying to cut the cost of paper checks, there’s absolutely no reason not to offer direct deposit.
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ringil
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Hey, she should consider herself lucky she even has a job, right? :yup:
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Corki
Guest
I’d like to see that law. I have worked with payrolls in several multi-state companies. They all required employees to sign up for direct deposit. Cutting checks and mailing them is costly, delays payment to the employees and is a pain-in-the-neck if an employee moves or loses a check.
Even the Social Security Administration requires recipients to have direct deposit or to get paid to a debit card.
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agnes_therese
Guest
According to the PA Dept of Labor website, employers are required to “pay in cash or by bank check.”
Expecting your employer to obey the law hardly qualifies as “trying to bilk the system.”
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losh14
Guest
I was concerned about this issue when Wal-Mart began paying employees with debit cards a few years back, which is noted (very briefly) in a related article to the story in this thread:
nydailynews.com/news/national/mcdonald-owners-sued-wage-debit-card-article-1.1375287
It is true that debit cards usually represent a better option for the employee than payroll-cashing services, so I’d prefer a debit card to a live check. But I don’t side with the franchise if the allegations are true:
State law allows for the [paperless] payroll method, but it’s unclear if it’s allowed to serve as the only option, as Gunshannon says was the case at McDonald’s. (emphasis mine)
There needs to be some option, whether there was or wasn’t here. We are in a mostly-digital payment society but not everyone is as connected, especially for lower-income households that tend to be underserved by financial institutions. Even digital payments have limits. I know of no apartment complexes in our area that allow for card-processed payments, while checks and direct payments from bank accounts are allowed. There is also the issue of security - funds in a bank account can be protected against theft in a way that a funds in a pre-loaded debit card cannot. And if Gunshannon doesn’t have reliable and safe internet access then she may not be able to access her funds when she needs to do so.
I agree to a point with SamH:
I can see Presurmksdimnds issue with Gunshannon having to form a banking relationship with a particular bank, without having a choice:
One of the many disparities in retail banking is that major institutions tend not to go into lower-income areas - and indeed have a business relationship with payday lenders and check-cashers such that it makes no financial sense to put a bank branch where they could otherwise earn larger profits through a partnership with a fringe financial company.
nydailynews.com/news/national/mcdonald-owners-sued-wage-debit-card-article-1.1375287
It is true that debit cards usually represent a better option for the employee than payroll-cashing services, so I’d prefer a debit card to a live check. But I don’t side with the franchise if the allegations are true:
This is the nature of the allegation, per the NYDN story:
State law allows for the [paperless] payroll method, but it’s unclear if it’s allowed to serve as the only option, as Gunshannon says was the case at McDonald’s. (emphasis mine)
There needs to be some option, whether there was or wasn’t here. We are in a mostly-digital payment society but not everyone is as connected, especially for lower-income households that tend to be underserved by financial institutions. Even digital payments have limits. I know of no apartment complexes in our area that allow for card-processed payments, while checks and direct payments from bank accounts are allowed. There is also the issue of security - funds in a bank account can be protected against theft in a way that a funds in a pre-loaded debit card cannot. And if Gunshannon doesn’t have reliable and safe internet access then she may not be able to access her funds when she needs to do so.
I agree to a point with SamH:
with the exception that the details she objects to - payment processing fees, how to use the debit card, whether there’s a no-fee ATM near her, etc - were probably not discussed. Similarly, you won’t find out in a job interview how much your health insurance premia will be, even though this is very important for salary negotiations. I’ve a friend who recently took a job with a small pay bump (about $5k annually) only to find out that the premiums were $600/month more at his new company.
I can see Presurmksdimnds issue with Gunshannon having to form a banking relationship with a particular bank, without having a choice:
However, I disagree that it’s wrong to force employees to have a banking relationship with an institution of their choice. As I said above, bank accounts are safer for the consumer than live checks or payments in cash, without even thinking about the cost savings to employers (which, for a franchisee, is probably small, less than $100/month). At least with a direct deposit payroll option Gunshannon can choose which financial institution, and her allegation is that no such option was given. But Presurmksdimnds concern is well-taken that Gunshannon is forced into a relationship with a particular bank. Whereas I can use my direct deposit into an institution with no-fee ATMs close to where I live and work, Gunshannon may not have that access because of the choice her employer made.
One of the many disparities in retail banking is that major institutions tend not to go into lower-income areas - and indeed have a business relationship with payday lenders and check-cashers such that it makes no financial sense to put a bank branch where they could otherwise earn larger profits through a partnership with a fringe financial company.
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mafh
Guest
My take on this is that the debit card payment system is ok if either:
*it’s optional for employees, and they could alternately choose paper check or direct deposit
or
*there were no fees to the employee for using the card (either fee-free card, at least for standard transactions, or employer pays fee)
If there is no way to get her wages off the card without incurring a fee, then I agree that this is a problem and the company is effectively paying her less than minimum wage. The $1.50 transaction fee may not sound like a lot, but if you are only making $7 or $8 an hour, it can add up fast.
In this case, her only option for payment was the card. From the article, it does not appear that there was any way to access the card’s funds without incurring a fee (unless I misread it). So, I think it was wrong, and she is in the right to bring this suit.
*it’s optional for employees, and they could alternately choose paper check or direct deposit
or
*there were no fees to the employee for using the card (either fee-free card, at least for standard transactions, or employer pays fee)
If there is no way to get her wages off the card without incurring a fee, then I agree that this is a problem and the company is effectively paying her less than minimum wage. The $1.50 transaction fee may not sound like a lot, but if you are only making $7 or $8 an hour, it can add up fast.
In this case, her only option for payment was the card. From the article, it does not appear that there was any way to access the card’s funds without incurring a fee (unless I misread it). So, I think it was wrong, and she is in the right to bring this suit.
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Trader
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You must not be trying very hard. I just counted up my checking accounts that have no minimum balance requirement or fees except inactivity fees. Some of them require a direct deposit to avoid a monthly fee. Those that require a direct deposit are marked with (*) with the required amount of the DD:
Ascencia Bank (online division of PBI Bank)
Bank of America * ($250)
BB & T * ($100)
Charles Schwab Bank
Chase (DD requirement waived with a relationship. I have 13 accounts with them)
Citi * no specific amount of DD required and pay one bill online–also pays me $4.25 in Thank You points every month
Fifth Third * ($500 total–does not have to be one transaction)
First Federal Bank of the Midwest
First Source Bank
FNBO Direct (online division of First National Bank of Omaha)
Huntington National Bank
PNC Bank
Regions Bank * ($500)
Salin Bank
Suntrust Bank * ($500)
US Bank
USAA Bank
Wells Fargo Bank * ($500)
All of the banks listed that require a direct deposit count ACH transfers from another bank as long as it is initiated from the outside bank. Chase, Citi, Schwab, and Huntington(five per month) do not charge a fee to make outbound transfers. I do not really need all these accounts but I get paid to have them and my motto is, “If the banks are throwing money at you, try to catch some.”
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SamH
Guest
Who said that?
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