Texas Subway Employee Files Lawsuit Over Payroll Debit Cards
Austin, TX (Law Firm Newswire) August 1, 2014 - A worker at a Subway restaurant outside of Austin, Texas has filed a class action lawsuit against his employer over its practice of paying employees with prepaid Visa cards, which may be subject to fees.
Jake Branson filed the lawsuit on his own behalf and on behalf of other Subway employees after his paper checks were replaced with prepaid Visa cards. He found that using an ATM to withdraw cash from the cards could result in a $1.75 fee, that checking the balance of the card cost $1.00, and that a $0.50 fee could apply when making a store purchase.
While regulation of prepaid cards varies, experts say that in Texas, the cards can typically be issued to employees who give consent.
“Texas labor laws usually permit employers to issue prepaid cards to workers who agree to the plan,” said Gregory D. Jordan, an Austin employment attorney. “A key factor in a case like this will likely be whether the employee really had a choice.”
Branson earns $7.25 per hour working at the Subway restaurant in Leander, Texas, which is operated by Destiny Foods. He said that transaction fees cost him $7 or $8 when he first began using his prepaid card. Now Bank of America cashes out his card free of charge, which is generally required under federal law. Branson said he asked his employer to bring back paper checks and was told no.
According to experts, prepaid cards are becoming more popular for wage payment. A study by the Aite Group research firm found that 3.7 million employees were paid a total of $26.6 billion using the cards in 2011. By 2016, the firm projects that those numbers will double.
Employers can sometimes save money by using prepaid cards, foregoing the cost of printing paper checks. The institutions that issue the cards profit from transaction fees. Some employees who do not have bank accounts may prefer the prepaid cards, as they may permit them to avoid check-cashing fees. But according to Branson, he and other employees had no choice.
Law Offices of Gregory D. Jordan
5608 Parkcrest Drive, Suite 310
Austin, Texas 78731
- Texas Federal jury finds Apache did not breach contract with W&T Offshore
A Texas federal jury found that Apache Corp. did not breach its contract with W&T Offshore Inc., a Houston-based oil and gas producer, in a dispute that began in 2011. The jury verdict was accepted by the U.S. District Court for the Southern District of Texas, while allowing W&T to file any post-verdict motions. Apache [...]
- More Texas Workers Are Filing Wage-and-Hour Lawsuits
Lawsuits filed by Texas workers claiming wage-and-hour violations have increased by 42 percent over the past three years and have tripled in the past ten years. According to research by Androvett Legal Media, Texas workers filed at least 922 federal lawsuits in 2014 — compared to 632 cases in 2012 and 280 lawsuits in 2004. [...]
- Secretary sues school district for discrimination and harassment
A Texas woman has filed a lawsuit against the school district that formerly employed her as a secretary at a public school. She alleges that she suffered discrimination and harassment during the time that she was employed there. Tesha Faith Garganta filed the lawsuit against the Spring Independent School District on February 6 in the [...]