B2B Payments

Suit Against McDonald’s Payroll Cards Continues

The owners of several McDonald’s locations in Pennsylvania are appealing to a judge who has refused to dismiss a lawsuit against the business owners who are facing charges that they unfairly and illegally force their employees to be paid via paycard.

Reports by Citizens’ Voice published Tuesday (Sept. 29) said the 16 restaurant owners have appealed an earlier decision by Judge Thomas F. Burke, Jr. that declined a request for summary judgment on the case last May. That decision accompanied Judge Burke’s statement that paycards are not “lawful money of the United States” as required to compensate employees under the Wage Payment and Collection Act, reports said.

The defendants, led by Albert and Carol Mueller, have reportedly appealed that decision to the Pennsylvania Superior Court.

The lawsuit is opening up a new debate about the practice of paying employees with prepaid cards instead of checks, cash or other payment methods. Proponents of payroll cards say they are key to paying the under- and unbanked population of the workforce.

But the lawsuit filed against the McDonald’s store owners say that the payroll cards are unfair because they come with fees for nearly every type of transaction, from ATM withdrawals to inactivity. Plaintiffs say these fees mean that employees have to unfairly pay to access their paychecks.

[bctt tweet=”A lawsuit filed against McDonald’s store owners says payroll cards are unfair because of their fees.”]

The cards are issued by JPMorgan Chase, according to reports. The case was certified as a class action in May.

The lawsuit coincides with separate action among policymakers in New York about the payroll card. The NY State Department of Labor has proposed new regulations to curb the fees associated with paycards, which are the crux of the issue in the Pennsylvania case.

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