RIVERSIDE, Calif. (CN) – Kmart pays workers with debit cards to hold back wages, make money on the float, and split fees with Citibank, disgruntled employees say in a class action.
Donte D. Winfrey Sr. sued Kmart aka Sears Holding Corp. in Superior Court on June 26. He claims that Kmart has paid workers for at least 4 years with debit cards from Citibank, and that it costs employees 50 cents per transaction to get their wages.
Kmart employees have had to pay the fees “hundreds of thousands if not millions” of times, Winfrey says.
Citibank is not a party to the complaint.
Winfrey called the debit card system “fraudulent” because fees and other deductions imposed by the bank deprive employees of their full wages.
In addition to the 50-cent fee per withdrawal, he and his fellow workers are subjected to limitations that prevent them from getting all their wages at once.
Winfrey claims Kmart and Citibank set up the scheme so they could use employees’ wages “as a ‘float’ for investment and financial purposes.”
The 21-page lawsuit never defines “float,” which presumably refers to the fact that Kmart and/or the bank earn interest on the wages during the time they hold them.
Winfrey claims Kmart also fails to clearly make overtime wages on pay stubs and does not fully reimburse people for travel expenses and mileage when they are given temporary assignments at other stores.
A Kmart spokesman told Courthouse News the company had not been served and could not comment on the case.
Winfrey seeks class certification, an injunction, restitution, disgorgement, and punitive damages for unfair business practices, failure to comply with the Private Attorneys General Act and other violations of the California Labor Code.
He is represented by Michael W. Parks with Schimmel & Parks of Sherman Oaks, who did not immediately reply to a request for comment.
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