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Employers Switching From Payroll Checks To Prepaid Cards With Fees

samzenpus posted 1 year,22 days | from the I-owe-my-soul-to-the-company-store dept.

Businesses 1103

An anonymous reader writes "The New York Times reports a growing number of American workers are being paid by prepaid payroll card. The cards often have fees attached to basic services like making a cash withdrawal or for inactivity. Some employees report that the employers pay by card by default, with paperwork barriers to opting out, and some report that their employers refuse to pay them by check or direct deposit. The issuing banks pitch the cards to employers as a cost-cutting payroll alternative, and sometimes even offer a financial reward for each employee they sign up."

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Weekly/Monthly Salary (0)

futuramasd (2958127) | 1 year,22 days | (#44153095)

Why does US companies pay weekly when other countries pay monthly?

Re: Weekly/Monthly Salary (1)

Anonymous Coward | 1 year,22 days | (#44153111)

They don't. They tend to pay bi-weekly.

Re:Weekly/Monthly Salary (2, Insightful)

Picass0 (147474) | 1 year,22 days | (#44153129)

Weekly? Bi-weekly seems to be the most common in the US.

I've been thin for cash during that second week enough times, I can only imagine how much worse it would be to go a whole month.

Re:Weekly/Monthly Salary (3, Informative)

michrech (468134) | 1 year,22 days | (#44153171)

As someone who gets paid once monthly -- it's not that bad, once you get your budget set up. I get paid on the last day of the month, unless that is a weekend, in which case I get paid the Friday before. I have *most* of my bills set to be due on the 5'th, so I get them all out of the way right up front. I have a few that are due around the 20'th, but since they are stable (IE: they don't change), it's easy to budget around them.

Re:Weekly/Monthly Salary (5, Interesting)

michrech (468134) | 1 year,22 days | (#44153187)

I should have mentioned -- I'm also paid via direct deposit. If my 'default' pay were via one of these crappy cards, I'd do *whatever* paperwork was needed to get a normal check or direct deposit...

Re:Weekly/Monthly Salary (2)

Lord Kano (13027) | 1 year,22 days | (#44153463)

Agreed. I would opt the hell out of those BS cards. I can't believe that this is even a real thing. The first I heard of it was last week.


Re:Weekly/Monthly Salary (5, Interesting)

dead_user (1989356) | 1 year,22 days | (#44153517)

I've mostly seen it used by companies that insist on direct deposit, with employees that refuse to have a bank account for whatever reason. Mostly labor workers, not skilled workers.

Re:Weekly/Monthly Salary (1)

Gr8Apes (679165) | 1 year,22 days | (#44153549)

Why would ANYONE want these cards - that completely contrary to all sorts of desired activities, such as paying your bills, mortgage, and saving.

Re:Weekly/Monthly Salary (1)

gorzek (647352) | 1 year,22 days | (#44153559)

These cards are usually issued to people who work in low-wage, low-skill jobs who may not have the means to acquire a traditional checking account. Many banks require you to keep a minimum balance in order to have a checking account, and we're talking about people who largely live paycheck-to-paycheck and would find it difficult to impossible to keep a few hundred dollars just lying around, untouched.

Payroll debit cards are seen as an advantage for people in this situation, because they can use it virtually anywhere and don't need a bank account.

That said, charging a bunch of fees is bullshit.

Re:Weekly/Monthly Salary (2)

emagery (914122) | 1 year,22 days | (#44153219)

I kinda like bi-weekly, myself... I budget myself around the idea of 24 (2x12) paychecks... but GET 26... which means two paychecks are entirely outside of the budget and are free-for-alls, basically.

Re: Weekly/Monthly Salary (0)

Anonymous Coward | 1 year,22 days | (#44153225)

so what you are saying is that you lack budgeting skills, and prefer to spend whimsically without future regard of yourself. WHICH IS OK, but don't make being paid monthly sound like a bad thing. because it's not

Re: Weekly/Monthly Salary (0)

Anonymous Coward | 1 year,22 days | (#44153309)

You should try to setup an ironman employment run then. 12 months between paychecks. That should be a better show stopper. Imagine the bragging rights.

Re: Weekly/Monthly Salary (0)

Anonymous Coward | 1 year,22 days | (#44153541)

You can do that yourself. Just put the payments in a separate account that you empty once a year. (At Christmas preferably.)

The only thing that you need is enough saved up to bring you through the year until you can make withdrawal. The majority of the Slashdot readership should have no problems saving up that amount.

Re:Weekly/Monthly Salary (2)

LordLucless (582312) | 1 year,22 days | (#44153259)

It's not hard. Really, unless you're saving absolutely nothing, you should have enough of a cushion to be able to spend into that in advance of the paycheck. If you budget properly, the dint in your savings is only short-term.

I get paid monthly; it goes into my mortgage, and I transfer out a weekly sum for day-to-day needs. I pay my bills straight from the mortgage.

Re:Weekly/Monthly Salary (2)

gl4ss (559668) | 1 year,22 days | (#44153285)

uh.. just live lighter for 4 weeks.

I think US companies just like to spend more on unnecessary paperwork.

monthly and directly to bank account is the norm over here.

Re:Weekly/Monthly Salary (1)

Lord Kano (13027) | 1 year,22 days | (#44153451)

Once a month isn't too bad if you're salary. It takes a couple of months to get the budget set up but once you do, it's not much worse than biweekly.


Re:Weekly/Monthly Salary (-1)

Anonymous Coward | 1 year,22 days | (#44153555)

My baseline spending is low compared to my salary, so I never look at my balance when I consider spending money. I am not even aware of what date I get paid. At this point I wouldn't notice any time soon if my employer changed to paying me quarterly. I wouldn't get any angry calls from the bank either. What happens if your baseline spending is lower than your salary is that money accumulates in your account without you knowing about it. Every few months I look at my balance and move the excess into a more proper form of savings. I've experienced a few times in my life where people were very apologetic about things that would temporarily negatively influence my cash flow, and it took me a while to realize what problem they were even talking about.

Re:Weekly/Monthly Salary (1)

DeciDigi (2283220) | 1 year,22 days | (#44153577)

I actually preferred being paid monthly. It was easier to get all of the bills paid in one chunk rather than having to balance them between paychecks (and still have enough to buy food). I also found it much easier to put money away into savings. With 2 checks it seemed easier to allow myself to be nickle and dimed, knowing that there would be another check in a few days.

Re:Weekly/Monthly Salary (1)

Shajenko42 (627901) | 1 year,22 days | (#44153159)

Depends on the job. Most salaried workers get paid monthly in the US.

Re:Weekly/Monthly Salary (1)

Anonymous Coward | 1 year,22 days | (#44153229)

Are you certain? My personal experience is that salaried workers in the U.S. usually get paid every two weeks or twice per month.

Re:Weekly/Monthly Salary (2)

Lord Kano (13027) | 1 year,22 days | (#44153497)

I've done both. I've been salary and bi-weekly, semi-monthly and monthly. I don't think there really is a "normal" in this regard. It's just whatever the employer feels like doing.


Re:Weekly/Monthly Salary (1)

technothrasher (689062) | 1 year,22 days | (#44153249)

> Most salaried workers get paid monthly in the US.

Really? I thought most state laws establish bi-weekly as the longest period allowed. In all the states I've worked it was that way.

Re:Weekly/Monthly Salary (2, Informative)

Anonymous Coward | 1 year,22 days | (#44153481)

Who knew there were so many state laws on this:

Re:Weekly/Monthly Salary (0)

Anonymous Coward | 1 year,22 days | (#44153375)

Is being paid monthly a recent change to, what I thought was the standard, bi-weekly? I have been paid 99% of the time bi-weekly (with the occasional job that pays every week), and only recently heard some contractors being paid monthly by their companies.

Sounds like another way for the bank to hold onto deposits longer to get whatever bit of interest income they can.

Re:Weekly/Monthly Salary (1)

Eowaennor (527108) | 1 year,22 days | (#44153445)

I think the norm in the US for exempt employees is twice monthly, with non-exempt being paid bi-weekly.

Re:Weekly/Monthly Salary (1)

jitterman (987991) | 1 year,22 days | (#44153471)

Not in my case as a US citizen. Four employers, four places where I was paid (and still am in the latest case) bi-weekly via direct deposit.

Re:Weekly/Monthly Salary (0)

Anonymous Coward | 1 year,22 days | (#44153235)

I get paid every other week, which is extremely common. Some people are paid twice a month (e.g. 1st and 15th or something like that).

But a lot has to do with the labor laws which require that non-exempt (normally paid by the hour) be paid within a certain period after they have done the work. I'm not sure, but I think that only someone who is exempt (not subject to overtime rules) can be paid monthly.

There is a very important distinction in the US between non-exempt and exempt workers. Non-exempt workers must be paid overtime (1.5x, usually) for working more than 40 hours in a week, must be paid within a certain time of doing the work, must receive at least an (unpaid) 30 minute meal break no less than 5 hours after starting work.

Exempt workers must fit one of the "managerial", "professional", "administrative" buckets. If you're exempt, you don't get paid overtime.. in fact, your pay cannot depend on how many hours you work (or you lose the exemption). You also have to meet a lot of requirements (pay must be at least 2x minimum wage, more than 50% of time spent on exempt tasks, etc.) No just printing "manager" on the business card of the guy sweeping the floors and saying "no overtime pay for you".

Re:Weekly/Monthly Salary (0)

Anonymous Coward | 1 year,22 days | (#44153425)

Depends on the company.

I have seen yearly, bi-weekly, bi-monthly, weekly. Even daily if you are a 'day worker'. The most common one you will see is bi-weekly.

The sooner the better you are. Setup a direct deposit that gains interest. You get the interest not your employer. Sure it is a miniscule amount but better than 0...

It is also a good barometer on the health of a company. If they skip you are only 2 weeks out instead of 4 weeks out...

This card scheme has not really been tested in court (yet). However, my guess is it will be struck down in many jurisdictions. There are many laws out there about how you can pay your employee. Especially in bigger cities like New York and Chicago. This is mostly a scheme to setup direct deposit for everyone and pass the savings onto the bank and the employer.

If they really wanted everyone to use direct deposit just offer some sort of bounty on it. Problem is the amount per check is probably so miniscule to not be worth offering it.

Re:Weekly/Monthly Salary (0)

Anonymous Coward | 1 year,22 days | (#44153443)

Why does US companies pay weekly when other countries pay monthly?

1. Most companies in the US pay every two weeks.
2. Months aren't all the same length.
3. With the exception of holidays, you get paid on days when banks are open.

As for the article, keep in mind that in the US you don't have to accept payment via any mechanism other than cash. However, employers have a certain amount of time to pay you after you've worked, and usually they pay within a couple weeks... but in most places they have at least a month if not longer.

How is this legal? (3, Insightful)

Anonymous Coward | 1 year,22 days | (#44153115)

I don't understand how this can be legal - fees for withdrawals is basically a pay cut. I guess this is what you get when you believe unions are evil...

Re:How is this legal? (4, Insightful)

sg_oneill (159032) | 1 year,22 days | (#44153223)

Its the sad old story. A century of gains to pay and conditions due to the hard work and often militancy of unions. Then everyone gets comfortable in the 80s ,decide reagans right and the unions are evil, and its all fine and dandy until the economy crashes and suddenly everyones up shit creek without a paddle because they abandoned the unions and theres no one left to stand up to this crap. Our chickens have come home to roost.

Re:How is this legal? (0)

gtirloni (1531285) | 1 year,22 days | (#44153373)

So unions should sell their services as insurance for the status quo basically? Looks a plausible strategy since they rarely help improve anything.

Re:How is this legal? (5, Insightful)

danbert8 (1024253) | 1 year,22 days | (#44153415)

Yes unions are so great that in many states and in many professions you are forced to join one. I have no problem with voluntary unions, but unions can be just as oppressive as employers.

Re:How is this legal? (1)

Rude Turnip (49495) | 1 year,22 days | (#44153551)

If your'e not happy being a worker bee in a union shop, you might be in a field where your aspirations will not be met. That's more or less my take on unions. They're good for certain fields, but not others.

Re:How is this legal? (2, Interesting)

bondsbw (888959) | 1 year,22 days | (#44153477)

This is idealized and only a few unions ever truly seemed to work for the employees.

A friend recently told me why he is no longer part of his union. This particular union provides legal protection, and that's the only reason anyone joins. The employees all keep a minor amount of petty cash on hand, which was against policy but everyone does it out of necessity (but everyone knows that requesting a check to be cut could take weeks or months, so they get away with it). But my friend's coworker got on bad terms with someone else, and that was taken to his supervisor who by policy had to take disciplinary action.

So he called his union. The union's response? "We suggest you resign."

This person had the same job for 29 years, mind you.

But he took his union's advice (which wasn't smart)... now he works in a grocery store and can't get a job in his field, because his action of resigning was basically admitting guilt.

Paying union dues for 29 years got him this.

Re:How is this legal? (0)

Anonymous Coward | 1 year,22 days | (#44153257)

C'mon America; you used to be such a beacon to the rest of the world.

Re:How is this legal? (-1, Troll)

Anonymous Coward | 1 year,22 days | (#44153417)

C'mon America; you used to be such a beacon to the rest of the world.

A beacon to the rest of the world ? In what era ? /sarcasm
The only value worth in the american system is the almight dollar. Everything else is secondary. Whatever social conquests were done, they were done because of "european" influences. Communism in its early years, and socialism. A time when trade unions and the worker movement acted as counterweight to the economic elites. From those confrontations came the american middle class. America has never exported anything worth a damn, except wars of conquest and genocides (the indian genocide).

Re:How is this legal? (2)

Anonymous Coward | 1 year,22 days | (#44153301)

lol - this has nothing to do with unions, and is in fact just as possible in a union shop. Do you honestly thing the union does anything for you? They'll sell you down the river for the latest BMW just as fast as the most greedy corporate CEO. The days of unions providing anything of tangible benefit are long gone.

Re:How is this legal? (4, Insightful)

Anonymous Coward | 1 year,22 days | (#44153345)

Actually, my union threatened strikes unless we were paid equally for equal work. They also cut out the effective overtime without pay that was going on (you must be available on cell at all times), and stopped the fire-rehire on lower contract that was threatened.

But, you know, your stories are good too.

Re:How is this legal? (4, Interesting)

Shortguy881 (2883333) | 1 year,22 days | (#44153505)

To the Anonymous Coward,

While unions have a potential upside for some workers, in an unregulated fashion, just as corporations, they will expand and abuse their power. In non-right to work states, this is very prevalent. Unions in such states have become mafia run organizations, bullying business for more contributions and bullying workers to participate and pay into these unions. They play both sides of the isle because they can, not helping either.

The point is Unions, unchecked, are no better than any other organization competing for your money and tend to lead to worse market conditions.

Re:How is this legal? (5, Informative)

green1 (322787) | 1 year,22 days | (#44153519)

and my union negotiated away double time overtime in favour of time and a half in exchange for union dues being deducted from the lump sum signing bonus...

But, you know, your stories are good too.

Re:How is this legal? (5, Insightful)

Anonymous Coward | 1 year,22 days | (#44153307)

This has nothing to do with unions. It's all about the corruption of banks and the force that they can impose through government laws that they help write (which is why more laws is exactly the problem). Take Wal-Mart for example. The problem is not that Wal-Mart doesn't have unions, it's that Wal-Mart relies on it's employees taking advantage of government welfare programs. If those programs didn't exist, people wouldn't even work at Wal-Mart because it wouldn't pay the bills, and when you don't have employees it's awfully hard to have a business.

So that's step 1, if Wal-Mart was forced to pay actual market wages, you'd see a huge shift in the flow of money through retail. Couple that with all the laws that prevent small banks from flourishing and you have a scenario where people are literally forced, by government violence, into slave labor wages using a system that only exists because government masters have ordained the banks as rulers of the universe (with laws written by said bankers).

The problem isn't unions (or lack thereof) all boils down to government being the problem, as usual.

Re:How is this legal? (4, Insightful)

royallthefourth (1564389) | 1 year,22 days | (#44153419)

Do you really think they'd try this shit if there was a well-organized, fighting working class? No way. They only do it because they think they can get away with it.

Re:How is this legal? (0)

Anonymous Coward | 1 year,22 days | (#44153455)

Keep believing your own bullshit man. It must smell very good indeed.

Re:How is this legal? (5, Insightful)

Anonymous Coward | 1 year,22 days | (#44153391)

I guess this is what you get when you believe unions are evil...

But they are! Unions have done nothing but raise costs and cause distress for all those poor whittle employers. Just think how much more work could be done without all the lazy people demanding "living wages" (they should be working 2 or 3 jobs instead of expecting decent pay!), 2 days off, working only 40 hours/week (and then if they work more many of these same fuckers expect time and a half!). And don't get me started on all the increased expenses just to make sure employees are safe at work. What country are we living in? The Soviet fucking Union!!! Even that name has that evil "union" word in it!

But more seriously, it is quite amusing since you know the same people who bash unions would throw a shit fit if they lost their weekends, 40 hour weeks, and other benefits that the average worker now takes for granted that took unions decades to get us.

Re:How is this legal? (4, Interesting)

ObsessiveMathsFreak (773371) | 1 year,22 days | (#44153439)

This is what you get when you believe that ever freer markets will do anything and everything more efficiently than ever before -- Chaos.

Any company that cannot handle its own payroll should not be licensed to trade. It's that simple.

Re:How is this legal? (2)

sosume (680416) | 1 year,22 days | (#44153571)

Besides, isn't this a form of a Truck System [] ? Which is illegal in many countries, but apparently not in the US.

I thought (3, Interesting)

Anonymous Coward | 1 year,22 days | (#44153125)

Most companies switched to direct deposit by now.

Gotta say (0)

Anonymous Coward | 1 year,22 days | (#44153131)

That is hilarious.

Walmart (2)

Flipstylee (1932884) | 1 year,22 days | (#44153143)

They were in the process of doing this when i left the company about 4 years ago, no word if it went through.
If so, that's a few million right there.

article missed some points (5, Informative)

Anonymous Coward | 1 year,22 days | (#44153157)

The NYTimes talks about the fees that come along with the use of a preloaded debit card, but in some states (e.g. California), there is a legal requirement that the employee be able to get their pay without any fees, etc. , and at a location convenient to them. No paycheck drawn on a bank in some other state with only 3 branches in that state, etc.

Mind you, that doesn't mean that employers actually follow the rules, or that the employees, who typically are spending all their time just staying alive, will pursue this with the Dept of Labor Standards Enforcement, but at least it is the law.

Colleges (1)

Anonymous Coward | 1 year,22 days | (#44153173)

Some colleges have been doing that with student aid payments. Alamo Colleges in San Antonio started doing something similar.

Wage Theft (5, Insightful)

skywire (469351) | 1 year,22 days | (#44153177)

Tell me again how it is the employee's responsibility to defray the employer's payroll processing costs?

Re:Wage Theft (3, Insightful)

cdrudge (68377) | 1 year,22 days | (#44153267)

I had a former employer that decided to cut direct deposit in order to cut "defray unnecessary expenses" for the 8 employees at the company. Apparently direct deposit was costing about $1 per employee every other week for payroll.

That was also the week that I started to look for a new job. Shortly thereafter, the company let everyone go.

Re:Wage Theft (0)

Anonymous Coward | 1 year,22 days | (#44153367)

You have highlighted the correct process of the free labor market. Thank you.

Saint Peter don't you call me 'cause I can't go (3, Insightful)

Anonymous Coward | 1 year,22 days | (#44153281)

I owe my soul to the company store

Re:Wage Theft (0)

Anonymous Coward | 1 year,22 days | (#44153333)

This is America.

I'll elaborate: This is the United States of America.

Furthermore: This is the United States of America where cost cutting goes so far, now even the cost of cutting costs is cut from the employee's pay.

Of course, I would never work for an employer who did this nonsense.

Re:Wage Theft (0)

Anonymous Coward | 1 year,22 days | (#44153395)

You are not paid by your employer, that's an economic fallacy. You, as an employee, add some amount of value to the goods and services provided by the company, and *that* is where your pay comes from.

The employee's take-home pay is that added value minus *all* costs associated with hiring *and* managing the employee. That includes the "employer contribution" to Social Security and all those worker-friendly regulations like OSHA.

If the added value is less than minimum wage + all associated costs + regulations, the employee simply doesn't get hired.

Re:Wage Theft (0)

Anonymous Coward | 1 year,22 days | (#44153493)

*golf clap* The world needs more corporate whores such as this man. He will bow down and suck your cock for the measly scraps you deem him worthy of receiving.

Congress (1)

Anonymous Coward | 1 year,22 days | (#44153179)

Congress should step in and outlaw or regulate this kind of thing.

Re:Congress (0)

Anonymous Coward | 1 year,22 days | (#44153491)

Congress should step in and outlaw or regulate this kind of thing.


Good one.

Because MORE laws from our masters only makes things better, right?

State of Oklahoma as well (5, Informative)

Dios (83038) | 1 year,22 days | (#44153185)

This frustrated me this year. I received a pre-pair card from the State of Oklahoma for my OK Tax Return. I swear I filled out the direct deposit info, but perhaps I didn't (I could check my copies...). What upset me is the fees for funds withdrawals/etc. This is my money, the state and its corporate partner shouldn't be making money off me when I try to get it.

The card did allow a single withdrawal without a fee at an ATM. I couldn't find an ATM it would work in. Finally logged in to the associated website and transferred to my banking account, with a $0.75 fee. What a crock!

Here's the Oklahoma website pdf detailing the info: []
and their FAQ: []

Re:State of Oklahoma as well (0)

Anonymous Coward | 1 year,22 days | (#44153289)

This to me is even worse than the payroll cards. You can chose your employer, you can't (realistically, not everyone is without family, friends, local ties folks) chose your state. Pretty offensive.

Re:State of Oklahoma as well (0)

Anonymous Coward | 1 year,22 days | (#44153523)

This to me is even worse than the payroll cards. You can chose your employer, you can't (realistically, not everyone is without family, friends, local ties folks) chose your state. Pretty offensive.

You can choose to not overpay your estimated taxes over the year.

Already in the courts (5, Informative)

schneidafunk (795759) | 1 year,22 days | (#44153197)

McDonald's is being sued [] for allegedly paying less than minimum wage using this method.

No, it's a franchisee getting sued. (4, Informative)

sirwired (27582) | 1 year,22 days | (#44153459)

McDonald's is NOT being sued. McDonalds has nothing to do with employee payroll processing in individual restaurants. The franchisee pulling this stunt is the business getting sued.

Perfect is the enemy of good. (4, Insightful)

140Mandak262Jamuna (970587) | 1 year,22 days | (#44153227)

The system of prepaid cards with fees is not the perfect solution for poor workers. But it is better than the old system of paying them with checks. Free checking is not available in most banks. Even when there is an allegedly "free" checking account it comes with a large minimum balance requirement. Fall below that and you trigger monthly fees. Further many people, mostly undocumented, don't have bank accounts and they use check cashing services that charge as much as 10% as the fees. So compared to those situations the prepaid card with fees is actually better.

The check cashing services are also closely allied with the pay day loan services that charge interests that work out to something like 240% on annualized basis. These check cashing services are one of the main opponents of Wall street reform, they are very well organized and media savvy. I would not be surprised if this sudden interest in prepaid card fees and the media blitz is actually organized by these loan sharks.

It costs money to process these transactions. It is not as much as the banks charge as fees and the fees can be unreasonably high. But still that is not as bad as what these check cashing services charge. I would rather work towards giving the regular banks some tax incentives to provide these prepaid cards without fees when they were given as wages for people below poverty line. Killing the whole idea of prepaid cards or demonizing the employers who provide them will prove to be very counterproductive.

Please educate yourself about the plight of the poor at the hands of check cashing services on one hand, checking account with fees on the other hand, people not having fixed addresses or visas who can not open bank accounts in the first place before jumping on the band wagon denouncing the wage card with fees or the employers who provide them.

Re:Perfect is the enemy of good. (2, Insightful)

Anonymous Coward | 1 year,22 days | (#44153295) them in cash...?

Re:Perfect is the enemy of good. (1)

140Mandak262Jamuna (970587) | 1 year,22 days | (#44153485)

So till all these companies gird up to make cash payments, the poor workers should suffer at the hands of the bloodsuckers? This is precisely what I mean by perfect being enemy of good.

It is like code release. Perfection is the goal. Better than last release is the shipping criterion.

Re:Perfect is the enemy of good. (0)

Anonymous Coward | 1 year,22 days | (#44153323)

Hand them a big bag of cash. Its not the workers fault/problem that the country club set has made it diffcult for them to be paid in the most convenient method for the employer. Make in inconvenient for the employers and then things will change.

Re:Perfect is the enemy of good. (1)

alen (225700) | 1 year,22 days | (#44153465)

they used to do this in the military decades ago. the result was that lots of soldiers would get robbed on pay day. the thieves would wait for them outside the base

Re:Perfect is the enemy of good. (1)

gl4ss (559668) | 1 year,22 days | (#44153339)

if they have work permits then surely they can get a banking account? I mean, it's not like USA is saudi.. seems to me that the government should have gone for promoting paying wages to bank account. I mean, fuck, they want to know my banking even when my banking is happening in Finland then surely they could see the benefits for IRS from everybody's wages being paid to their bank accounts..

Re:Perfect is the enemy of good. (0)

Anonymous Coward | 1 year,22 days | (#44153511)

Good luck if you're on Chex Systems, even through no fault of your own.

Re: Perfect is the enemy of good. (1)

Anonymous Coward | 1 year,22 days | (#44153341)

We should require payers, not employees, to pay any transaction costs. Anything else is NOT charity.

Re:Perfect is the enemy of good. (0)

Anonymous Coward | 1 year,22 days | (#44153369)

This is only a problem for people who don't shop around, or have bad credit. Sure you get hit with a fee at the bank if you fall below minimum balance, but it's like $10 /mo. That's a heck of a lot less than what you get gouged for by these check cashing outfits. Mostly the people getting clobbered by those guys are the same people cashing bad checks and not paying their bills. In other words, as it should be.

Re:Perfect is the enemy of good. (5, Informative)

xaxa (988988) | 1 year,22 days | (#44153371)

The system of prepaid cards with fees is not the perfect solution for poor workers. But it is better than the old system of paying them with checks. Free checking is not available in most banks.

Then why not fix that problem? You also enable poor people to pay bills electronically, buy things online, etc.

British banks have to* offer a "basic bank account", which has no fees (as normal in the UK) but doesn't allow any borrowing, and so doesn't require a credit check. If you have a valid identity document, and don't have "multiple convictions for fraud", you can get one: []

It's not that well publicised. For a while, I lived with some Eastern European immigrants in a cheap flatshare in London. They were keeping cash under the bed, but they all were able to open a basic account.

*As is often the case in the UK, instead of a law or regulation the industry is doing something on the understanding that if they didn't, there'd be a regulation, and it'd be worse for them.

and, in california, fees are prohibited for pay (0)

Anonymous Coward | 1 year,22 days | (#44153399)

So either the employer has to make arrangements to turn the card into cash for free, in a reasonably convenient way, or arrange for no fee usage at local banks. Both are possible.

In general, it is referred to as the pay received "free and clear" laws, and are a reaction to the "payment in scrip redeemable only at the company store" phenomenon of the early 20th century. ("I owe my soul to the company store")

For that matter, it's part of Federal Law, as well
"The Department's regulation at 20 CFR 655.122(p) provides that required wage payments must be received free and clear"

Re:Perfect is the enemy of good. (4, Interesting)

JudgeFurious (455868) | 1 year,22 days | (#44153403)

No doubt about it. Check cashing is a lucrative business. It's not just check cashing services either. A lot of pawn shops will cash your pay check for a ridiculous fee with minimal identification. Back in the early 90's I worked at a very old pawn shop in Houston for about a year. It was a terrible job that paid well but left me feeling like I always needed a shower. You basically just take complete advantage of people who are very desperate for money and who don't understand how much money you're charging them. Every Friday we'd get a flood of guys (many didn't speak English) coming in to cash very small paychecks that they worked very hard for. You would charge them 10% of what the check was and a surprising number of people were totally fine with that.

Re:Perfect is the enemy of good. (0)

Anonymous Coward | 1 year,22 days | (#44153423)

This entire wall of text is simply false ....

Nearly all nationwide big banks offer free checking and while most accounts do have a sizable minimum deposit, those are ALWAYS waived if you sign up for direct deposit into the account you're opening, then minimum deposit is like 50 or 100$

Re:Perfect is the enemy of good. (4, Insightful)

vikingpower (768921) | 1 year,22 days | (#44153435)

Free checking is not available in most banks. Even when there is an allegedly "free" checking account it comes with a large minimum balance requirement.

Please educate yourself about the plight of the poor at the hands of check cashing services

Seen from Europe, the US banking system looks somewhat like the US infrastructure, that is: having missed quite some long-due overhauls.

Re:Perfect is the enemy of good. (0)

Anonymous Coward | 1 year,22 days | (#44153437)

The credit unions in my state have $25 minimum savings balance, no minimum checking balance, and free checking.
Why anyone would ever give a dime to a bank is beyond me.

Well two problems with that (5, Informative)

Sycraft-fu (314770) | 1 year,22 days | (#44153475)

1) You can, indeed, get free checking from Credit Unions pretty easy. Some banks too. There really are places that'll do business with you for no money up front and they won't charge you fees so long as you don't do things like overdraw.

2) They say companies are trying to do this instead of direct deposit. DD costs companies next to nothing. The Automated Clearing House (which is how they all do it) charges $0.35/transaction. This is why companies like to pay people that way. It adds just a trivial cost, and it all automated, the money comes out of their account in to yours. Well the only reason to go prepaid cards instead would be because the bank is bribing them, not because it is cheaper because the ACH cost is just fucking trivial.

This is not a matter of being nice to poor employees, this is a matter of fucking people over.

I could certainly understand offering it as an option. Maybe some employees would find it convenient or financially advantageous. But trying to force people on it? That is just trying to screw them over for a very minor benefit. Like I said, ACH is $0.35/transaction (or 0.06% of a minimum wage paycheck, not counting payroll tax and all that jazz if you want to look at it that way) and it is good bookkeeping wise since the transaction hits right away so you know the status of your current accounts.

Re:Perfect is the enemy of good. (1)

N0Man74 (1620447) | 1 year,22 days | (#44153483)

So you are justifying the greed of employers with the greed of banks?

It used to be that you could cash pay checks (at least from the bank used by the employer) without paying a fee or having an account yourself. Since I entered the workforce, this has changed. Now banks (including the bank that the employer is using) will require that you have an account, or that you pay a fee, or both.

Re:Perfect is the enemy of good. (1)

ObsessiveMathsFreak (773371) | 1 year,22 days | (#44153501)

What happened to paying in cash?

Re:Perfect is the enemy of good. (3, Interesting)

Formorian (1111751) | 1 year,22 days | (#44153507)

Um I worked in banking all though College part time for 7 years (day off for half saturday work to get all my homework done). Every Bank i worked at had free checking with 0 min balance.

Maybe it's a state thing, but NY i'm pretty sure every bank has to offer a free checking account, no min balance (maybe $100 to open but you can go to $0.01 without penalty/closing it).

Also, why do people still use banks, use a credit union. Better terms/fee's/interest rates/etc. Don't know why people are still using banks.

Next, most of those cards have free use. Free wherever mastercard/visa is. If you want the cash, you can go to banks that do credit card advances, and get the cash most times.

Someone posted about OK's tax refund from their website:

You can use the card anywhere MasterCard is accepted. At the gas station, grocery store, department store, on-line store and many more. You can also take the card and PIN number to any bank or credit union that accepts MasterCard and ask the teller for the full amount of the card balance in cash or deposit it into your checking or savings account. You can also withdraw funds from the card free of charge from any MoneyPass ATM location in Oklahoma.

I know in NY NY issues benefits for Workers Comp/Disability on Master Card state cards. They would come in and withdraw the full amount without fee's.

Re:Perfect is the enemy of good. (1)

Formorian (1111751) | 1 year,22 days | (#44153525)

Sorry meant to put this about the OK tax thing, the question was:

How can I use my refund debit card free of charge?

then taht's the answer. Every card like this issued has some form of means of getting the cash for free.

Re:Perfect is the enemy of good. (1)

Lunix Nutcase (1092239) | 1 year,22 days | (#44153533)

Free checking is not available in most banks.

It's available in basically every national bank chain and pretty much every credit union I've ever checked with. You pretty much have to go out of your way to find a bank that doesn't offer free checking.

Even when there is an allegedly "free" checking account it comes with a large minimum balance requirement.

The highest I've ever seen is $500. And even that usually gets waived if you sign up with the bank through an employer deal.

Re:Perfect is the enemy of good. (0)

Anonymous Coward | 1 year,22 days | (#44153567)

Checks can be cashed at the bank they are written from FOR FREE without a back account. There is no excuse for using a "check card" or "debt card" with a fee to pay employees except to get a kickback. These cards are not a good solution.

Educate yourself before spewing bullshit.

Well, wait... (4, Interesting)

Penguinisto (415985) | 1 year,22 days | (#44153237)

Ostensibly, this is a means to help folks who don't have a bank account to carry electronic money around. In some cases, it's on the up-and-up; many of these cards charge monthly fees that are lower than what, say, Bank of America will weasel out of you on a monthly basis. I had a NetSpend card for awhile as an experiment of sorts, and it worked out very well... enough to get me to drop my old BoA account for about a year, until I found a credit union that better suited my needs.

OTOH, many of these cards are shady as hell, and little wonder some employers push them - the kickbacks have got to be extremely tempting, to say the least. Then again, many banks are just as bad, if not worse.

Long-term, I see it as an overall move towards ditching cash altogether - the poor are the last barrier to such a society, and these card programs are aimed squarely at them. Most are unable to get a bank account (bounced checks, etc), they often get state assistance nowadays in the form of debit cards now. OTOH, cash has a wonderful way of getting paid without the IRS knowing about it, so I can see government's angle in wanting e-money over the regular stuff. Cash also makes it hard for police to track money flow, etc... so yeah, I can see the allure from that viewpoint. I can also see the allure of not having to print and distribute paychecks from the employer's end.

All that said, I wonder how long it will be until cash is done away with altogether, and what the drawbacks to society will be from doing so. Cash is a beautiful means of buying things without the purchase being tracked (and yes, most times it is not only legit, but done for good reasons), and it has the advantage of being accepted pretty much anywhere (even if you have to convert currency first. Finally and most important, cash doesn't require a transaction fee every time it gets used - way too much room for abuse and corruption there.

There are already lawsuits over this practice (5, Informative)

Br00se (211727) | 1 year,22 days | (#44153241)

Re:There are already lawsuits over this practice (0)

Anonymous Coward | 1 year,22 days | (#44153413)

I fail to see how the method of payment is somehow an afront to an employee, so much so as to warrant a lawsuit. If she doesn't like how she's paid she's welcome to work somewhere else.

Re:There are already lawsuits over this practice (1)

Br00se (211727) | 1 year,22 days | (#44153545)

There are several key issues with this case.

One, she made minimum wage, any loss of pay due to unavoidable fees on top of taxes, etc. would reduce her pay below that legal rate.
Two, the state she worked in has a requirement that “The wages shall be paid in lawful money of the United States or check."
Three, there appears be have been no notice given that she would be paid in a non-standard way.

I hope she wins and this predatory practice ends before it gains too much momentum.

survival of the least stupid (2)

slashmydots (2189826) | 1 year,22 days | (#44153321)

Any company stupid enough to drive people away with such a stupid payroll system definitely deserves to go under after leaving behind only the bottom of the barrel worst employees. Anyone with half a brain left to go work somewhere else.

Re:survival of the least stupid (2)

vikingpower (768921) | 1 year,22 days | (#44153397)

Amen. BTW: here in the EU, such practice would not only be illegal ( it is illegal, under EU law, and therefore under the law of all member states, to NOT pay monthly wages directly into a bank account; also, it is illegal for either employer or payroller to deduce anything from a worker's wages ): people would revolt. The practice mentioned in TFA is sheer exploitation.

Re:survival of the least stupid (1)

gutnor (872759) | 1 year,22 days | (#44153553)

You check to get back in sync with current economic realities. The time when you walked out of a job to get another one next door with better condition are over. Especially for low level jobs, but even for qualified job if you are not in a major city.

Re:survival of the least stupid (1)

TimHunter (174406) | 1 year,22 days | (#44153569)

(Not sure if trolling)

You're assuming that they have a choice. When jobs are hard to find (416,565 people are unemployed here in N.C.) a lot of folks are grateful to have a job at all, much less able to choose between jobs.

Aren't fees usually waived? (1)

Anonymous Coward | 1 year,22 days | (#44153379)

I work at Walmart, which not so long ago began to require direct deposit. I prefer direct deposit myself, and have always been using it with my local credit union.

Yes, the debit card that walmart offers has fees attached. BUT If you are an employee AND you have direct deposit to that account, the usage fees are waived.

I have one of the walmart branded "money cards" even though I've always has my regular checking account with said local credit union. Due to cut work hours hours I donate plasma (to supplement my income) twice a week. The plasma donor pre-paid visa has fees attached, which really sucks. To minimise the fees that I pay I set up a measly $10 per pay check to be direct deposited to the walmart debit card. I then load money from the "plasma" card to the "walmart" (one transaction) which allows me to avoid fees. Normally loading the "walmart" debit card would cost me $3, so it's a total rip off for the general public.

Bank fees (4, Informative)

Bradmont (513167) | 1 year,22 days | (#44153383)

I agree this is heinous, but it's just a symptom of a problem that's beem going on for decades. Why are bank transaction fees acceptable *at all*? Banks used to pay interest for the privilege of using/investing my money while I have it in their bank. I shouldn't have to pay to use what belongs to me, and I don't understand why people put up with it. I personally use baning services that don't charge fees; they exist, why dont more people uae them?

Gamestop did this bullshit over 10 years ago (1)

Anonymous Coward | 1 year,22 days | (#44153499)

I worked for Gamestop and they had this convoluted system where you got an atm card and stack of blank checks to the account. This was their method if you couldn't direct deposit. It was bullshit because there is no bank to go to in order to get your money that you earned with the card. Most ATMs would fee you, effectively a pay cut. The consolation was that you could go to Wawa ATMs because those were free, but because ATMs are limited to $20, you couldn't get to the remainder of your money from 0.01-19.99$. And the "convenience" checks they gave you were ridiculous. You basically hand wrote your own paycheck, had to call the company for an authorization number to put on the check (which didn't look like a real check to begin with) and then you had to get the teller to call in another authorization. There were a few times where I had to get bank managers involved because the tellers would look at the check and tell me it wasn't legitmate and wouldn't go through the effort to try to cash it. On top of that It's even more bullshit because the company doing the payroll here CLEARLY is making interest off of your money, not you.

This has to die.

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