» Texas Subway Employee Files Lawsuit Over Payroll Debit Cards

Texas Subway Employee Files Lawsuit Over Payroll Debit Cards

Austin Oil and Gas Attorney, Gregory D. Jordan

Austin Oil and Gas Attorney, Gregory D. Jordan

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
Call: 512-419-0684

View Larger Map

  • Texas employment lawsuit claims company made employees work off the clock
    An employee at a Texas call center has filed a lawsuit claiming that she and other employees were not paid for work that they were required to do off the clock. Elissa Shetzer filed the lawsuit in U.S. District Court for the Eastern District of Texas against her employer, Harte-Hanks Response Management/Austin LP, which manages [...]
  • Texas Supreme Court hears gas royalties case
    The Texas Supreme Court heard arguments in a lawsuit by property owners against Chesapeake Energy, claiming that the energy giant improperly withheld millions of dollars in natural gas royalty payments. Chesapeake is appealing a 2014 ruling by a San Antonio appeals court that upheld a decision by a state district court awarding at least $1 [...]
  • Texas Supreme Court Rules in Favor of Oil & Gas Royalty Owners on Post-Production Costs
    On June 12, the Texas Supreme Court upheld rulings by two lower courts that post-production costs had been improperly withheld by Chesapeake Energy Corp. from royalty payments for production of natural gas in the Barnett Shale. The state high court’s 5-4 decision in Chesapeake Exploration, LLC v. Hyder clarifies when post-production costs may be exempted [...]

See other news sources publishing this article. BETA | Tags: , , , , ,

Get headlines from Law Firm Newswire sent right to your inbox.

* indicates required