A recent issue that touches on employment law, franchise law and modern banking policies comes to us from Pennsylvania, but we thought it raised enough interesting issues that it was worth telling our Orlando audience about.
Pennsylvania is where a woman sued a McDonald's franchise after it allegedly tried to pay her in a fee-laden prepaid debit card.
The woman is suing on behalf of herself and other workers at the franchise because they had no option to be paid by traditional paper check or by direct deposit, meaning they had no choice but to see some of their wages siphoned off by the debit card's fees for things like getting cash from an ATM, paying bills online and checking the balance of the card.
The woman's argument is that this practice violates Pennsylvania payroll laws. The woman refused to activate the debit card because she objected to the fees, so she never received the wages for the time she worked at the franchise.
Interestingly enough, it's not quite clear whether it's legal to pay employees only with prepaid cards and no other means. Prepaid cards are legally allowed as a means to distribute wages in Pennsylvania, but it isn't clear if that remains true when workers have no option and are forced to receive their pay that way.
A spokeswoman for the owners of the franchise said they had not actually been served with the lawsuit yet and so would not be commenting on it.
As we see it, there are many legal issues here that could be sorted out. Both credit card companies and banking giants have invested heavily in prepaid debit card programs, so it's unlikely they will give up the push to get them into wider use any time soon.
Source: Orlando Sentinel, "McDonald's sued for paying Pa. employees with fee-carrying debit cards," Bob Kallinowski, June 16, 2013