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.
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