Not just McDonald's using debit cards to pay employees...

[dixiegrrrrl]

New York Attorney General Eric Schneiderman sent letters to about 20 employers that allegedly are using ATM-like cards to pay their hourly employees.
Among the businesses being investigated are retail giants Walmart, McDonald’s, Home Depot and Walgreen’s.

The attorney general’s investigation will examine the three ways in which these companies pay their employees: paper check, direct deposit and prepaid cards.

Under New York state law, employees must give their consent to be paid by payroll cards, and acceptance of this form of payment cannot be a condition of employment.

However, there are many additional fees associated with the use of such cards, including withdrawal fees, replacement fees, inactivity fees and a fee for requesting a paper statement.

According to the Federal Reserve, the prepaid card is the fastest growing non-cash method of payment.

Banks are eager to partner with businesses that use the cards because of the fees associated with them.

http://legalnewsline.com/news/242698-consumer-worker-advocates-praise-n-y-ag-for-investigation-into-prepaid-cards

[Solly Mack]

1. K&R

[NightWatcher]

2. How long till some (Walmart) pay only in store credit?

And how before its treated like a benefit? I see Wally World doing this.

[KansDem]

6. Store credit? To be used at the "company store?"

[Wounded Bear]

3. A lot of temp agencies have that option...

Yes, it can be a 'benefit' to those without bank accounts, and especially those without addresses, but yeah, the fees....

Luckily, I haven't been forced to go that way yet.

[think]

4. New alternatives like Dwolla.com are emerging. Will be interesting to see

if they can grab a foothold and become mainstream:

https://www.dwolla.com/

[sakabatou]

5. Doesn't surprise me

[Ms. Toad]

7. The contract someone posted here

Waived fees associated with the cards, as long as the payment was essentially treated like a check. I.e. no fees as long as the account was used for the deposit of the money, and a single withdrawal per pay period. That permits the employee to have immediate access to cash - something many unbanked customers have to pay dearly to get, because no one will exchange cash for the check without extracting check cashing fees.

This should not be done without the consent of the employee (and if an employee cannot reject the option without risking loss of employment), and there should be no fees as long as there is no charge for the account and a withdrawal per pay period is permitted without charge. As long as the accounts comply with those restrictions, it seems to me to be a net gain for people who don't have a regular bank. (Yes, there are additional fees associated with these accounts - as there are with many banking accounts, which most of us who have banks can avoid by careful planning or choosing a different bank - and we shouldn't be paternalistic about the ability of people who have fewer resources to manage those fees when there is an easy way to avoid them.)

[hunter]

8. I'm not sure what to make of this.

I've seen some odd things in my community. There's a couple of places in our county that cash farmworkers' checks, some of them for reasonable rates compared to the vultures at the strip mall payday check places. One place I've been to is utterly wild west. Every Friday there's a cowboy sitting on a folding chair holding a shotgun watching the line while a clerk behind bullet proof glass counts out the cash. The rest of the time the place is an ordinary convenience store, all the signs in Spanish, half the customers speaking the native American languages of Central America. I think the owner is Korean and I imagine half the workers cashing checks are undocumented. But don't you complain, these are the folks who grew your dinner. The guys who own the farms know bankers and politicians personally and won't feel any heat if a labor contractor he hired, or the guys cashing the payroll checks, get in trouble with guys wearing badges.

I'd love to see the U.S. government get into this business of payday debit cards, in subsidized direct competition with commercial providers. Social Security, welfare, unemployment benefits, even lower wage employers could use a no-fee government service just like cash. Commercial card and check cashing services would just have to suck it up as a condition of doing business in the USA. They wouldn't be able to prey on people living in poverty.

[dixiegrrrrl]

9. "I'd love to see the U.S. government get into this business of payday debit cards"

The Gov't IS in the business of those cards.
Since the banks own the Gov't.....
You might be aware that starting in 2011...maybe a bit earlier...everyone who got a Soc. Sec. check was told they had to either go direct deposit or would be issued a debit card for their benefits as of Jan.1, 2013.
The cards would be handled by JP Morgan (?) or one of the TBTF banks, and fees were built in.
Now we are seeing how the idea, and the profits spread.

The Gov't is contracting damn near everything out to private business..double the cost, reduce the accountability.
No way is there gonna be a Gov't run competitive business, against the huge profits the banks and other check cashing
places are making.

[hunter]

10. They contracted it out. That's where we went wrong.

But you are correct. The system is corrupt. Big money owns us,