Payroll Cards Aren’t Money, Court Says

(CN) — Paying Pennsylvania employees with debit cards is not a valid way to pay wages, a state appeals court ruled in a class action against McDonald's franchisees.

Ruling out of Harrisburg on Friday, an appellate panel with the Superior Court of Pennsylvania affirmed advancement of the case in the Luzerne County Court of Common Pleas.

The Pennsylvania Wage Payment and Collection Law is clear, Judge Anne Lazarus wrote for the panel: Employees must be paid either by check or lawful U.S. money, and debit cards do not count as lawful U.S. money.

Lead plaintiff Alisha Siciliano sued Albert and Carol Mueller dba McDonald's on Aug. 23, 2013, for having paid them with JP Morgan Chase payroll cards since November 2010. They sought compensatory and punitive damages.

The class was certified in May 2015 and two weeks later the trial court denied the Muellers' motion for summary judgment. The Muellers filed an interlocutory appeal, and the unanimous three-judge panel affirmed the trial court ruling.

"The WPCL [Wage Payment and Collection Law] states that wages 'shall be paid in lawful money of the United States or check.' The language is clear. A debit card is not 'lawful money' and it is not a 'check' as contemplated by the drafters of the WPCL. We agree with the learned trial judge, the Honorable Thomas Burke, Jr., that the Legislature obviously did not contemplate the concept of a payroll debit card when it adopted the language of section 260.3 in 1961," Lazarus wrote.

The Muellers' argument that the debit cards are functionally the same as checks or lawful money fails because the cards may subject employees to fees, the judge found.

The American Payroll Association said in an amicus brief that employers can pay employees through direct deposit, but Lazarus said employers may do this only at the written request of employees.

"The use of a voluntary payroll debit card may be an appropriate method of wage payment. However, until our General Assembly provides otherwise, the plain language of the WPCL makes clear that the mandatory use of payroll debit cards at issue here, which may subject the user to fees, is not."

Class counsel David Senoff with Anapol Weiss said: "We were pleased with the ruling. The fact that it was unanimous not only underscored the merits of our argument, but underscored what I thought was an excellent opinion of the trial court. It leaves little doubt in my mind about the illegality of receiving your wages by debit card without any option."

The Muellers are represented by Matthew Hank with Littler Mendelson, who said, "The Muellers are aware of the ruling and they are evaluating their options."

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