Target to Honor Gift Cards That Were Not Activated

by Ben Jackson 0

Federal authorities interested in a lawsuit against a McDonald’s in Pennsylvania are determining if any national labor laws were violated when a former worker claimed management forced her to use a prepaid debit card to access her wages instead of a check or direct deposit.

From the Times-Tribune:

The U.S. attorney’s office for the Middle District of Pennsylvania asked the Department of Labor to “look into it to determine if federal action is appropriate,” Heidi Havens, a spokeswoman for the U.S. attorney’s office, said.

“At this point, it is too soon to tell what specific action, if any, there would be,” Ms. Havens said.

Lenore Uddyback-Fortson, a Department of Labor spokeswoman, said the department was aware of the McDonald’s case, but could not confirm or deny if there is an active investigation.

“The agency has seen more of the use of debit cards to pay employees within the past several years as it is growing in practice,” Ms. Uddyback-Fortson said. “As long as the fees do not cause wages to drop below $7.25 per hour, the federal minimum wage, the practice does not violate the Fair Labor Standards Act.”

J.P. Morgan Chase, which issues the payroll cards some McDonald’s use, told the Times-Tribune it negotiates with employers way employees can access their funds free:

“There are some fees if you choose to use those options, but there are also free options,” Mr. Fusco said.

Lawsuits such as this one involving prepaid cards do not bode well for the industry as consumers and media tend to get the wrong impression about these products. Even if this particular McDonald’s franchise is at fault, all anyone will remember is that a prepaid debit card caused a problem in the first place.

Click here to read more from the Times-Tribune. Visit InComm’s Prepaid Strategy Session on Payments Journal.

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