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Debit Cards Instead Of Paychecks? McDonald’s Employee Sues

After working for a month at a Pennsylvania McDonald’s, Natalie Gunshannon had not been paid. The franchisee for whom Gunshannon worked required all employees to receive their earned wages on a debit card but Gunshannon refused to activate hers.

After reviewing the fee structure of the debit card system, the former McDonald’s employee questioned if it was actually a legal pay practice. The payroll card, issued by J.P. Morgan Chase, requires users to pay a fee for just about any use of the card, including $1 to check the balance and ensure a paycheck has been properly deposited.

The fees only go up from there. Making a cash withdrawal from the card carries a $5 fee, withdrawing money using an ATM tacks on a $1.50 fee (likely in addition to whatever fee is charged by the owner of the ATM) and $0.75 each time the card is used to pay bills online. It’s worth noting that the nearest Chase ATM – an ATM that wouldn’t cause her to incur fees in addition to the card’s $1.50 price tag – was 60 miles from Gunshannon’s home.

Gunshannon is fighting back. With the help of a local attorney, she has filed a lawsuit seeking class action status for what she believes is an unfair and illegal payment practice.

The use of payroll cards seems to be gaining ground across the U.S. The FDIC estimates that over $60 billion in wages will be paid using debit cards in the next year. Wal-Mart has been giving employees the option of receiving payroll cards or having paychecks direct deposited since 2009.

Source: Orlando Sentinel, “McDonald’s sued for paying Pa. employees with fee-carrying debit cards,” June 16, 2013

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