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Pennsylvania court: McDonald's franchisee can't pay employees with debit cards

October 26, 2016

A Pennsylvania Superior Appeals Court panel upheld a previous decision that owners of 16 Pennsylvania McDonald's restaurants were violating the law when hourly workers were paid only with fee-laden debit cards, according to the Associated Press. The decision solidifies the previous ruling of Luzerne County Judge Thomas Burke Jr. in 2015, when he granted class-action status to employees suit who claimed they were charged fees for many transactions on the cards.

The panel ruled last Friday that debit cards are not lawful money or checks as defined by Pennsylvania Wage Payment and Collection Law. Franchise owners, Albert and Carol Mueller, had maintained that the cards were the "functional equivalent" of lawful money.  As a result of the ruling, the Muellers said employees would now have a choice of payment by check, direct deposit or payroll card. 

In its ruling the Superior Court said, "The use of a voluntary payroll debit card may be an appropriate method of wage payment," but until lawmakers decide otherwise, the judges said, "mandatory use of payroll debit cards at issue here, which may subject the user to fees, is not."

A lawyer for those 2,400 plaintiffs told AP that they had "won a long hard battle."

When reached this Thursday by QSRweb.com, McDonald's said the company will not comment on pending litigation.