Last week, New York Attorney General Eric Schneiderman started looking into the controversial new practice of issuing workers debit cards in lieu of paychecks. The practice first came to light last month when an employee of a McDonald’s franchise in Pennsylvania sued over being forced to accept pay in the form of debit cards. Soon after, the New York AG’s office sent inquiries about debit card payroll practices to several companies, along with a request to see a list of fees associated with the cards.
Some of the companies that were contacted by the AG’s office were high profile brands such as Wendy’s, Costco, Darden Restaurants and Walmart. As the list suggests, these are enormous corporations with lots of hourly workers. Instead of a physical paycheck or direct deposit, workers get debit cards they can use to purchase items or access cash via ATMs.
So far so good. But workers soon discovered that such transactions are often laden with income–reducing fees on common transactions such as balance inquiries and even penalties for periods of inactivity…
Continue reading the article at U.S. News & World Report.
