Parker Waichman LLP

Workers Paid by Card Face Array of Fees

As a growing number of American businesses, particularly retailers and restaurants, switch to paying workers’ wages with prepaid cards, workers find they must pay fees to access their pay. For many lower-paid, mostly hourly workers, paper paychecks and even direct deposit have been replaced by prepaid cards issued by the employer. Employees can use these […]

prepaid_paycheck_cardsAs a growing number of American businesses, particularly retailers and restaurants, switch to paying workers’ wages with prepaid cards, workers find they must pay fees to access their pay.

For many lower-paid, mostly hourly workers, paper paychecks and even direct deposit have been replaced by prepaid cards issued by the employer. Employees can use these cards, which work like debit cards, at automatic teller machines (ATMs) to withdraw their pay, The New York Times reports.  But most employees paid this way must pay fees to use the card, and the fees quickly add up. According to the Times, one provider charges $1.75 to make a withdrawal from most ATMs, $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.

When the fees are taken into account, some employees’ pay falls below minimum wage, attorneys and regulators say. One such employee, a 21-year-old man who earns $7.25 an hour at a McDonald’s drive-through window, says he spends $40 to $50 a month in fees for his JPMorgan Chase payroll card, though some transactions are free.

Because payroll cards were not hit by recent stricter regulations on credit and debit card fees, they represent a lucrative area for banks, the Times reports.

Many employees say they have no choice but to accept the cards because their employers no longer offer paper checks or direct deposit. Companies say they are switching to payroll cards because prepaid cards are less costly for them. Some card issuers offer employers incentives to switch employees to the cards. According to the New York Times, the New York City Housing Authority receives a dollar for every employee it signs up to Citibank’s payroll cards.

The Times reports that some employees have resorted to withdrawing their entire pay in cash to avoid paying a fee each time they make a transaction. One Pennsylvania McDonald’s employee quit her job over the card and is suing the franchise’s owners. “I know I deserve to get fairly paid for my work,” Natalie Gunshannon said.

 

What Our Clients Say About Us
We have worked with thousands of clients and we appreciate them and their positive reviews. Here are just a few recent client reviews...
5 Star Reviews 150
I would like to thank Kathy and Alex for all their hard work and dedication through out the entire process. I am very happy with the outcome of the case. I would highly recommend to my family and friends.
Alanah Rotunno
7 months ago
5 Star Reviews 150
Jamie Sussman
6 years ago
5 Star Reviews 150
Thank you very much for your good work, they work very excellently and my case went well. I am very satisfied with Parker Waichman LLP, thank you and I recommend them. They are very kind. I thank Jorge and Maryann for being very kind and always attentive to my case.
La estrella marina
8 months ago

Why Choose Us to Help You?

We Take Care of Everything
Your situation is stressful enough: Let us take on the deadlines, paperwork, investigation, and litigation. We'll handle every detail so you don't have to worry.
No Recovery = No Legal Fees
We work on a contingency-fee basis, meaning that we only get paid from a portion of your settlement or jury award. If you don't get compensation, you owe us nothing.
Decades of Experience
Your situation is stressful enough: Let us take on the deadlines, paperwork, investigation, and litigation. We'll handle every detail so you don't have to worry.
Respected by Our Peers
Judges, insurance adjusters, and fellow attorneys all speak highly of our skills, and we've earned numerous accolades, including a flawless rating from AVVO.
We Have Many Locations To Serve You
We have the experience and the skilled litigators to win your case. Contact us and speak with a real attorney who can help you.
Long Island – Nassau
Parker Waichman LLP
6 Harbor Park Drive
Port Washington, NY 11050
Long Island – Suffolk
Parker Waichman LLP
201 Old Country Road – Suite 145
Melville, NY 11747
New York
Parker Waichman LLP
59 Maiden Lane, 6th Floor
New York, NY 10038
Queens
Parker Waichman LLP
118-35 Queens Boulevard, Suite 400
Forest Hills, NY 11375
Brooklyn
Parker Waichman LLP
300 Cadman Plaza West
One Pierrepont Plaza, 12th Floor
Brooklyn, NY 11201
New Jersey
Parker Waichman LLP
80 Main Street, Suite 265
West Orange, NJ 07052
Florida
Parker Waichman LLP
27299 Riverview Center Boulevard
Suite 108
Bonita Springs, FL 34134
Nationwide Service
Parker Waichman LLP
59 Maiden Lane, 6th Floor
New York, NY 10038