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Owed Unpaid Wages?

Information for workers owed unpaid wages.

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Payroll Debit Card Fees

Employers are increasingly using prepaid debit cards to pay employees’ wages and overtime. While they can be an effective and lawful means for reducing administrative costs, forcing workers to incur transaction fees can dilute their take home pay, resulting in compensation that’s less than minimum wage.

Debit cards are no doubt an immediate and convenient method for employers to disburse payroll, and to some degree, employees should applaud the effort. When workers shoulder the cost of those cards, unjustly enriching their employers, they become the inadvertent victims of wage theft.

Fees assessed from the use of payroll debit cards can vary in size and description:

  • Account transfer fees
  • ATM cash withdrawal fees
  • ATM declined transaction fees
  • Check and statement mailing fees
  • Fees for non-monetary ATM transactions
  • Inactivity fees
  • Lost or stolen card fees
  • Monthly maintenance fees
  • Stop payment fees

Regardless of the amount, however, these fees can reduce an employee’s wages below the guaranteed minimum wage.

This is particularly troubling for low-wage workers that don’t have bank accounts. The federal Fair Labor Standards Act and state wage and overtime laws do not dictate the methods or systems by which employers pay their workers, but the FLSA prohibits any payment method that doesn’t pay employees wages in a “free and clear” way.

Payroll debit cards offer a more flexible and convenient alternative to paper paychecks, but excessive transaction fees associated with the cards, as well as unused dollars left on a card, penalize the employee while providing an economic benefit to the employer.

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News

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  • DOL: Alabama Security Company Withheld Millions in Wages

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