Debit-Card Payment Lawsuit Rattles PA McDonald's

Before a proposed class action lawsuit has even got off the ground, Pennsylvania franchises of McDonald’s have offered more payment options following allegations that their debit card-only policy was effectively stealing money from employees.

Although managers and assistant managers retained the option to receive direct deposit payments, 16 McDonald’s in PA allegedly required workers to activate the debit card to be paid.

The lawsuit was filed last month by Natalie Gunshannon after she was told that wages could only be provided in the form of a JPMorgan Chase Payroll Card. The card requires fees be paid for ATM withdrawals, online payments, and after 90 days of inactivity – a practice which Gunshannon claims led, in practice, to hourly workers being paid less than minimum wage at times. Although managers and assistant managers retained the option to receive direct deposit payments, 16 McDonald’s in PA allegedly required workers to activate the debit card to be paid. As a cheaper form of payment, cutting out the cost of check distribution and payroll fees, the move seems to have been part of efforts to cut costs. However, Gunshannon alleges in the lawsuit - which could seek a class certification to include other debit card-paid employees – that hourly workers were given no choice. ATM withdrawals using the card came with a $1.50 fee, while online purchases charged 75 cents and inactivity for 90 days led to a $10 fee.

The franchises have now agreed to offer paper checks, direct deposit, or payroll cards, although the lawsuit, filed in the Luzerne County Court of Common Pleas, will continue seeking class action status. The lawsuit has been filed under the state’s Wage Payment and Collection Act citing unjust enrichment.