Thursday, June 20, 2013

Employer Would Pay Workers Via Debit Card With Lots of Fees To Eat Up Workers' Earnings

A woman in Pennsylvania, Natalie Gunshannon, was just about to start working at a local McDonald's.  She was going to earn just $7.44 an hour, not much more than the $7.25 minimum wage in her area.

In other words, she'd need every penny she took home from her job.
No thanks, says a woman whose employer
wanted to pay her with a fee-laden debit card

Not so fast, said her employer. The boss said she'd only be paid via a Chase Bank debit card.  That maybe would be a good deal for Chase, and probably for the employer,  but not for Natalie, according to

There's tons of fees with that debit card. $1.50 for each ATM withdrawal. $5.00 for each over the counter cash withdrawal. It'll cost $1.00 for every balance inquiry, and 75 cents for every online bill payment. And if she lost the card or it got stolen, that would set Natalie back $15.00.

You can see why she objected. By the time she pays all the fees, there's nothing left for frivolous luxuries like food, rent and utilities.

She went to a lawyer, naturally, trying to get this state of affairs overturned.

I hope she's successful. I'd hate to see a trend take root in which we're paid through expensive debit cards that make us pay all these expensive fees just to access what is and should be our money.

I can see all kinds of problems for employees who get paid through debit cards. If the card isn't at the bank or credit union they normally do business with, they'd have to pay fees to transfer to their accounts, or move their banking business to an outfit they might not want to go to.

And you'd probably have to keep a minimum balance in the account through which the debit card is issued. That unnecessarily ties up money in a bank account that is not used. And you'd have to constantly monitor it so you don't pay huge overdrafts.

Of course, if an employee wants to be paid via a debit card and the employee offers it, why not? Some people are willing to pay a few fees for the convenience of holding a debit card. More power to them.

The trick here is to make the debit card an option, but NOT a requirement.

Let's stop nickel and diming low wage employees so the banks can make more money, OK?

I'm all for banks making money, as long as the money they take in is given to them voluntarily.

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