Employers around the country are looking to implement an easier means to compensate their employees, but rather than solving a payroll issue, it is causing issues with payroll. Various institutions around the country are compensating their employees through a pre-paid debit card system in which the employer deposits an employee’s wage into a pre-paid account that can be accessed through the debit card. Supposedly, this practice is to allow employees without bank accounts to access their funds without having to visit a check cashing center. It seems brainless; it seems harmless.
However, a Pennsylvania based fast food chain has been slammed with a class action lawsuit stating that employees could not access their funds without paying a sort of processing fee. The ultimate decision, it seems for now, stands as thus:
An employer, in fact, can use this method of payment as so long as it is a voluntary practice or is a system that employees can opt into or out of. It is unlawful, however, to have this system as a blanket means of compensation for your employees.