A McDonald's franchise promised to give employees more payment options after it was sued by a former employee who said she was charged a fee to access her wages from a debit card.
Employees of 16 McDonald's restaurants in northeastern Pennsylvania will be given the option of getting paid via direct deposit or paper check, company spokeswoman Christina Mueller-Curran said Monday. They'll also continue to have the ability to use payroll cards.
"We wanted to take swift action," Mueller-Curran said. "Our employees have always been our No. 1 priority."
In her lawsuit, ex-employee Natalie Gunshannon said she was charged $1.50 to withdraw cash. The lawsuit focused attention on the practice of paying low-wage employees via debit cards that can be laden with fees.
The company introduced the payroll card about 18 months ago because many of its 800 employees did not have bank accounts, and were being charged to cash checks, Mueller-Curran said.
"We didn't hear any complaints. Many employees have been using these cards without complaint for many months. When it became apparent there were some employees who may want the choice, we're going to give them the choice," she said.
Gunshannon has said that when she complained about the fees on her payroll card, she was told there were no other payment options.
She said Monday that she was subject to withdrawal fees because she did not live anywhere near a branch of JPMorgan Chase, the payroll card issuer. She said that while she's happy her former co-workers will no longer have to use the cards, her ex-employer is engaging in "damage control."
"They're trying to lessen the blow," she said. "The law states already that they had to give people an option in the first place."
Gunshannon's lawyer, Michael J. Cefalo, said the lawsuit will continue. He said the lawsuit seeks punitive damage because the company "willfully violated" state law that says employees should be paid by cash or check.
Many employers are trying to save on the expense of issuing paper checks by turning to direct deposit or payroll debit cards. Depending on the fees they charge, payroll cards can be beneficial for people who do not have bank accounts. But opponents say cards with high fees mean that some workers are essentially making less than minimum wage.
Nearly 4 million U.S. households, or 3.2 percent, have someone receiving wages on a payroll card, according to a 2011 survey by the Federal Deposit Insurance Company.