$3.5 Million Reasons why Fee-Laden Debit Cards are NOT the Best Idea for Payroll

Warning!! Not Firefighter Related . . . But interesting story from Pennsylvania today . . .

Ever think about paying your workers with “fee-laden debit cards?” Just as an FYI, it is probably not the best idea.

A Pennsylvania judge recently approved a class action settlement between almost 2,400 former and current McDonald’s employees that were paid with “fee-laden debit cards.” These plaintiffs sued McDonald’s franchise owners Albert and Carol Mueller, not for violations of the FLSA, but for violations of the Pennsylvania Wage Payment and Collection Law. That state law requires employees “be paid by ‘lawful money’ or check.’”

The plaintiffs claimed they were not paid with “lawful money” or checks, instead they were paid with J.P. Morgan Chase payroll cards. These cards carried the following fees:

  • $1.50 for ATM withdrawal
  • $.75 to use the card on-line
  • $5.00 for “over-the-counter” cash withdrawals
  • $1.00 to check card balance
  • $10 per month if card was “inactive” for more than three months

On Tuesday October 24th, Luzerne County Pennsylvania Judge Thomas Burke, Jr. approved a settlement that provided each plaintiff (almost 2,400 in total) $1,200 in damages plus an additional $858,000 for the plaintiffs’ attorneys. This settlement does not include money the Mueller’s may have paid their own attorney or attorneys. While exact terms of the settlement are not yet available, suffice it to say; $3.5 million buys a lot of burgers and fries…

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