WILKES-BARRE, Pa. – An appeals court has upheld a judge’s decision that the owners of 16 McDonald’s restaurants in Pennsylvania violated state law by paying hourly employees strictly with fee-laden debit cards.
Luzerne County Judge Thomas Burke Jr. last year granted class-action status to a 2013 lawsuit by employees who said the payroll card they were forced to use charged fees for numerous kinds of transactions.
The three-judge Superior Court panel agreed Friday that a debit card “is not ‘lawful money’ and is not a ‘check'” as deemed by the Pennsylvania Wage Payment and Collection Law. The franchise owners had argued that a debit card was the “functional equivalent” of a check or lawful money.
After the suit was filed, franchise owners Albert and Carol Mueller said they would give employees the choice of being paid by check, direct deposit or payroll card. A spokeswoman for the franchise owners said they were evaluating their options.
The Superior Court noted that state lawmakers are still trying to decide how to regulate debit cards as a form of payment for work.
“The use of a voluntary payroll debit card may be an appropriate method of wage payment,” the court said, but until lawmakers decide otherwise, “mandatory use of payroll debit cards at issue here, which may subject the user to fees, is not.”
Attorney Michael Cefalo, who represents about 2,400 people in the class-action suit, said his clients “won a long hard battle.”
Representatives for Oak Brook, Illinois-based McDonald’s Corp. didn’t immediately return a message seeking comment Tuesday.