Debit Card or Paycard Investigation

While employers can pay employees using debit cards or paycards, it becomes illegal when done without the employee’s consent and when use of the card forces the employee to incur fees.

Regardless of the method of payment, employers must pay employees their full wages and the employees must have instant access to them.  Further, if the employees are paid with debit or paycards, the employees must be allowed at least one transaction per month without incurring any fees.

Fees incurred for using these cards, when taken out of the employee’s balance, would mean that full wages were not paid.  This exposes employers to liability under the Fair Labor Standards Act (FLSA) and California labor laws, and rightfully so.

Class action attorneys are currently investigating this illegal practice and have found that it is widespread and indiscriminate. Such fees include charges for using out-of-network ATMs, fees for overdraft protection, transferring funds, balance inquiry, consumer purchases, account closing, lost card, inactivity, and others.

While payment using these cards may seem convenient to both employers and employees, this method actually benefits the employer, to the detriment of the employee–if the employee incurs fees for using the cards.  Employers enjoy net savings from the cost of issuing paper checks and associated expenses, while employees suffer in the form of lower take-home pay, sometimes causing their pay to fall below the minimum wage.

If you received wages from your employer in the form of debit or paycards, you may be entitled to compensation.  Call the attorneys at CounselOne today for a free consultation at 310-277-9945 or complete the form above to see whether you have a legal claim.