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McDonald’s Franchisee Sued For Requiring Employees to Use Debit Cards to Obtain Wages

The days of trading items for other items are all but gone. Individuals might still maintain this practice in private between one another, but when it comes to how companies can pay their workers, they usually only have two choices: cash or check.

The rise of technology has led to other options, such as direct deposit and debit cards, but not all of these new options are allowed under the relevant labor law. According to Pennsylvania’s Wage Payment and Collection Law (WPCL), employers are permitted to use only cash or checks to pay their workers.

But a recent class action wage and hour lawsuit filed against a Pennsylvania McDonald’s franchisee, alleges the franchisee’s use of debit cards to pay employees their wages is a violation of the WPCL.

The class action lawsuit was filed against Carol and Albert Mueller, who, together, operate 16 different McDonald’s franchise locations across Pennsylvania. They allegedly used debit cards to pay almost 2,400 employees their wages from late 2010 until the summer of 2013.

The Muellers asked the court to dismiss the lawsuit, saying the cards were the functional equivalent of money and could easily by converted into cash.

But that gets a little messy because the WPCL was written in the early 1960s – long before anyone could have ever thought of debit cards as a viable payment option. So then the question becomes a matter of whether the decades-old law can reasonably be interpreted to include debit cards. The Mueller’s say it can. So far, the judges disagree.

Because this is the first case of its kind in Pennsylvania, it was moved to the Superior Court, despite the fact the trial court never resolved the dispute in its own jurisdiction.

As the appellate court noted, there is a part of Pennsylvania’s banking code that allows companies to make payments into a bank account, credit union, or other such financial institution that has the capability and authority to accept deposits or payments as designated by the recipient.

The problem with that provision, the court pointed out, is that it can only be used when the recipient of the money gives their express permission. The written opinion said that could not have been the case for the workers involved in this wage and hour lawsuit because the debit cards were a requirement of employment.

For workers in a minimum wage job in a struggling economy, job opportunities are few and far between. If an employer offers a position that comes with a debit card instead of a paycheck, few workers have the luxury of being able to turn that down.

The opinion issued by the appeals court states that the WPCL unmistakably prohibits the use of debit cards that may charge the user fees in order to be able to access that money.

The Muellers and their attorneys have not said what will come next, although they may be considering appealing the decision. The plaintiffs had already asked the Pennsylvania Supreme Court to take the case as a matter of urgent importance to the public, but the Supreme Court refused to hear the case.

That may or may not change as a result of the appellate court’s decision in the matter.

Our Oak Brook, Illinois consumer rights private law firm handles individual and class action gift card, data breach, privacy rights, deceptive advertising, predatory lending, unfair debt collection, lemon law and other consumer fraud cases that government agencies and public interest law firms such as the Illinois Attorney General may not pursue. Class action lawsuits our law firm has been involved in or spear-headed have led to substantial awards totalling over a million dollars to organizations including the National Association of Consumer Advocatesthe National Consumer Law Center, and local law school consumer programs. The Chicago consumer lawyers at Lubin Austermuehle are proud of our achievements in assisting national and local consumer rights organizations obtain the funds needed to ensure that consumers are protected and informed of their rights. By standing up to consumer fraud and consumer rip-offs, and in the right case filing consumer protection lawsuits and class-actions you too can help ensure that other consumers’ rights are protected from consumer rip-offs and unscrupulous or dishonest practices.

Our Naperville and Aurora consumer attorneys provide assistance in data breach, privacy violation, fair debt collection, consumer fraud and consumer rights cases including in Illinois and throughout the country. You can click here to see a description of the some of the many individual and class-action consumer cases our Chicago consumer lawyers have handled. A video of our lawsuit which helped ensure more fan friendly security at Wrigley Field can be found here. You can contact one of our Deer Park and Prospect Heights consumer protection, gift card and data breach attorneys who can assist in consumer fraud, consumer rip-off, lemon law, unfair debt collection, predatory lending, wage claims, unpaid overtime and other consumer, or consumer class action cases by filling out the contact form at the side of this blog or by clicking here.  You can also call our toll free number at 630-333-0333.

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