Employers Switching From Payroll Checks To Prepaid Cards With Fees 1103
An anonymous reader writes "The New York Times reports a growing number of American workers are being paid by prepaid payroll card. The cards often have fees attached to basic services like making a cash withdrawal or for inactivity. Some employees report that the employers pay by card by default, with paperwork barriers to opting out, and some report that their employers refuse to pay them by check or direct deposit. The issuing banks pitch the cards to employers as a cost-cutting payroll alternative, and sometimes even offer a financial reward for each employee they sign up."
How is this legal? (Score:3, Insightful)
I don't understand how this can be legal - fees for withdrawals is basically a pay cut. I guess this is what you get when you believe unions are evil...
Re:How is this legal? (Score:4, Insightful)
Its the sad old story. A century of gains to pay and conditions due to the hard work and often militancy of unions. Then everyone gets comfortable in the 80s ,decide reagans right and the unions are evil, and its all fine and dandy until the economy crashes and suddenly everyones up shit creek without a paddle because they abandoned the unions and theres no one left to stand up to this crap. Our chickens have come home to roost.
Re:How is this legal? (Score:5, Insightful)
Yes unions are so great that in many states and in many professions you are forced to join one. I have no problem with voluntary unions, but unions can be just as oppressive as employers.
Re:How is this legal? (Score:5, Interesting)
Indeed. Here in Australia many of the top professions (lawyers, doctors and the like) are both union shops and closed shops. The professional bodies set the rules and decide how many people to allow in.
Funny though, these bodies are never called unions. What's good for the goose does not appear to be good for the gander.
Re:How is this legal? (Score:5, Insightful)
If you have to be oppressed by someone, being "oppressed" by a Union is likely a far better option.
Re:How is this legal? (Score:5, Insightful)
As I said there are exceptions, but as a general rule it's better to live in a state where there are strong unions than one where there aren't any.
Better for whom? The union-protected workers who know the union will leap to their defense if they screw off on the job, or the people who have to pay the union workers to get something done?
I used to go to trade shows in Atlantic City. That's the epitome of a "strong labor union" area. We had a display that needed to be set up after the boxes it came in were delivered, and then the boxes needed to be taken away. We had electrical equipment that needed power. Getting all this done required the benevolence of half a dozen unions. I say "benevolence" because if we dared to plug something in ourselves the other unions would react in solidarity with the electrical union and we'd get things done -- next week, maybe, maybe later. After the show was over. If we dared to try to put up our own display, same problem. Chairs? Well, the chair moving union didn't like us moving chairs without involving them. At union rates. (I was on a TV set one time and a chair needed to be moved about a foot to the left, so I moved it. You'd think a nuclear bomb was about to go off, all the consternation and brouhaha that went on. I did a stage hand's job! And I wasn't a stage hand! The HORRORS! I would have asked the union guy standing next to me to do it, but he was an electrician and he doesn't move chairs.)
The expense of going to that show was outrageous, and most of it was due to union wages for people to do menial tasks. And to pay for the union reps who did nothing else but watch to make sure nobody did anything a union worker had to be paid to do.
Unions raise the wages paid for jobs covered by their union,
Pray tell, what is the current value of someone plugging in an extension cord, compared to the union wage of the two people required to do that task? How about the cost of having to wait until they can be found and pleaded with to pretty please come plug this in and get the job put on the schedule for later that afternoon? And what is the expense to the public when the 'extension cord plugger in' union goes on strike and all the others go out in support so that nothing can be done, and if anything is done someone will come around and cut up your extension cord because you used scab labor to plug it in?
Some unions do some good things. Some unions take it to extremes and cost us all a lot more money. Unfortunately, the unions that need the most protection are the ones who do the most ridiculous things in the name of protecting their members.
Re:How is this legal? (Score:5, Interesting)
Well, yeah, if you like to skew your history to suit your political bias, that's the story.
There's plenty examples of cycles like that in history. What really happens is that there's an inequality (employers vs employees), the employees band together to address the inequality (unions), then the inequality slowly slips the other way (union corruption), forces gather to displace the unions, and the cycle starts again. It's an alternation between two inequalities, with only a brief period of equilibrium. Portraying either the employers or the unions as pure of heart is equally disingenuous.
Re:How is this legal? (Score:4, Informative)
Except if you compare private sector wages in right-to-work vs. collective bargaining states. GDP per capita differences are all over the place, but in states that don't engage in union busting, wages are higher.
Re:How is this legal? (Score:4, Insightful)
"Except if you compare private sector wages in right-to-work vs. collective bargaining states. GDP per capita differences are all over the place, but in states that don't engage in union busting, wages are higher."
"Right to Work" and "union busting" are two VERY different things. While your comment is not an explicit lie, it implies one.
Actual "Right to Work" laws merely say you don't have to belong in a union to work somewhere. It doesn't say you can't. In fact, in many industries we see union and non-union employees working side-by-side in the same jobs.
In this state, before Right to Work, lots of jobs were restricted: you either joined the union or you didn't work. That's not "protecting" anybody; the union becomes an elitist club and people are left without work (UNLESS, of course, they want to join the union which will take their dues and spend them on political candidates the employee loathes).
Calling that "union busting" is misleading to the point of lying. Busting of union monopolies, more like.
Re:How is this legal? (Score:5, Insightful)
in states that don't engage in unions...wages are higher
I also fixed that for you.
You must be American. Having worked in countries with unions and without them, I can unequivocally say that the pay rate is higher where you have unions.
Unions only live by sucking funds from workers, remember.
Unions are the workers. They don't suck from themselves, the suck from the companies.
Re:How is this legal? (Score:4, Interesting)
Re:How is this legal? (Score:5, Informative)
Seriously, Detroit isn't a state, and right-to-work West Virginia lost the same quantity of coal-related jobs when the U.S. de-industrialized a bit over the last decades. There are multiple factors in play, which makes cherry picking easy, and people in union allowing states are better off on average.
A bit more detail on just how dramatic the difference in wages is, and yes, there is a rising tide effect where non-union employees earn more in a union state: Not just an opinion [epi.org]
Re:How is this legal? (Score:5, Funny)
Union won't cover embezzlement? Oh deary me, how cruel.
Re:How is this legal? (Score:5, Insightful)
Personal Anecdote FTFail!
Here are a few things you can "blame" on Unions:
Now, please regale up with more tales of flight and fancy and how the unions are to blame [youtube.com]!
Re:How is this legal? (Score:5, Insightful)
This has nothing to do with unions. It's all about the corruption of banks and the force that they can impose through government laws that they help write (which is why more laws is exactly the problem). Take Wal-Mart for example. The problem is not that Wal-Mart doesn't have unions, it's that Wal-Mart relies on it's employees taking advantage of government welfare programs. If those programs didn't exist, people wouldn't even work at Wal-Mart because it wouldn't pay the bills, and when you don't have employees it's awfully hard to have a business.
So that's step 1, if Wal-Mart was forced to pay actual market wages, you'd see a huge shift in the flow of money through retail. Couple that with all the laws that prevent small banks from flourishing and you have a scenario where people are literally forced, by government violence, into slave labor wages using a system that only exists because government masters have ordained the banks as rulers of the universe (with laws written by said bankers).
The problem isn't unions (or lack thereof)...it all boils down to government being the problem, as usual.
Re:How is this legal? (Score:5, Insightful)
Do you really think they'd try this shit if there was a well-organized, fighting working class? No way. They only do it because they think they can get away with it.
Re:Wal-Mart does pay market wages (Score:5, Insightful)
Re:How is this legal? (Score:5, Insightful)
I guess this is what you get when you believe unions are evil...
But they are! Unions have done nothing but raise costs and cause distress for all those poor whittle employers. Just think how much more work could be done without all the lazy people demanding "living wages" (they should be working 2 or 3 jobs instead of expecting decent pay!), 2 days off, working only 40 hours/week (and then if they work more many of these same fuckers expect time and a half!). And don't get me started on all the increased expenses just to make sure employees are safe at work. What country are we living in? The Soviet fucking Union!!! Even that name has that evil "union" word in it!
But more seriously, it is quite amusing since you know the same people who bash unions would throw a shit fit if they lost their weekends, 40 hour weeks, and other benefits that the average worker now takes for granted that took unions decades to get us.
Re:How is this legal? (Score:5, Informative)
I live in a country free from unions.
Last month our boss did not pay out R&D salaries. "Project is late, nobody gets paid until you deliver." From experience we know
that the first one to file a suit is fired, possibly with false accusations of sexual misconduct at work. Seen it happen.
Too bad I am dependent on the company to stay in the country, if I quit I am thrown out within five days, with nowhere to go. So
I am hoping I get my June and July salary in August (because the project is still not on par with management expectations).
That is what you get without unions. Someone who can gather everyone at the company and say: "nobody works until you pay".
Comment removed (Score:5, Insightful)
Union's purpose once reasonable goals achieved (Score:5, Insightful)
But more seriously, it is quite amusing since you know the same people who bash unions would throw a shit fit if they lost their weekends, 40 hour weeks, and other benefits that the average worker now takes for granted that took unions decades to get us.
I don't think any sensible person would argue that many of the things unions accomplished in years past have been unambiguously good. Furthermore a union can be an important counterweight to management excesses. My father was a union member for many years and it probably kept him employed in the face of some pretty inept management. Unions even can help make companies more productive in some cases. Conceptually I'm actually a supporter of unions.
The problem is that many unions have ceased trying to fight for what is reasonable. They aren't fighting anymore for a reasonable work week or improved safety or to get benefits in most cases. They often seem to care little about the health and competitiveness of the company. They make the (false) argument that their own actions and demands somehow cannot have a detrimental effect on the company and that the only goal of management is to screw the union members. Once things become reasonable the unions seem unwilling to drop their adversarial position. I have NEVER seen a union go to management and say, "hey, I see that our retirement costs have become a big burden that is hurting the company. How can we help?" No, instead they simply fight tooth and nail for more even when more isn't really possible. Unions quite simply haven't realized that they've won and keep fighting to the long term detriment of everyone.
If companies tried to change the 40 hour work week then unions likely would enjoy a surge in popularity because then they would be fighting a worthy cause for reasonable working conditions. When work conditions and pay are already are reasonable, unions need to recognize that they need to serve a much more limited purpose. Should management start behaving unreasonably then a union has every right and obligation to take measures to protect the union membership.
Re:How is this legal? (Score:5, Interesting)
This is what you get when you believe that ever freer markets will do anything and everything more efficiently than ever before -- Chaos.
Any company that cannot handle its own payroll should not be licensed to trade. It's that simple.
Re: (Score:3)
Besides, isn't this a form of a Truck System [wikipedia.org]? Which is illegal in many countries, but apparently not in the US.
Re:How is this legal? (Score:5, Insightful)
No, I don't think it is, because it is actually US dollars held by a FDIC financial institution. The case you can make is that it's a violation of contract to pay effectively lower wages by payment processing fees being taken from the worker's side instead of the employer's. Of course, these employees probably all signed contracts that prohibit class action lawsuits(thanks supreme court!), and individual suits are more expensive than the recuperated costs.... so... basically fuck you.
Re:How is this legal? (Score:5, Informative)
Recognize:
(1) This situation is often better than the alternative, where the employee gets a check and has to go to a check-cashing place, which charges even higher fees.
(2) The card fees are generally transaction-based, so the fewer transactions, the less in fees: The guy in the article who spends $40/month on fees is a moron: He should take all the money out in one fell swoop. That might cost him $1.75, but that's far less than he would have paid at a check-cashing place.
(3) Despite what the article says, this is usually what happens when the employee doesn't choose direct-deposit. There may be a few employers out there who are actually dropping direct-deposit, but the majority of employers are using these cards only for those people to whom they usually issued checks.
I don't understand why so many low-income people don't have bank accounts. Free checking still exists at smaller local banks and credit unions (check out first citizens, for example). If they got bank accounts with direct deposit, they could move away from these cards.
That said, it is disgusting how the big banks seem to be gleeful about making money on the ignorance of poor people.
Re:How is this legal? (Score:5, Interesting)
1, if they've written bad checks, the bank simply won't give them an account. 2, when your money is in the bank, it can be easily taken without your consent - various kinds of debt, credit agencies, lawyers, even the feds. Cash money in hand (or hidden wherever), much harder for third parties to access, hence, you can live easier when in trouble. 3, banks keep shitty hours: when you need your money in the evening and you can't get it, that can be a problem when the issue at hand is diapers, etc. 4, even when "free", make an error (common with low income types), and the bank will hose you with a huge fee (or fees... they can be pretty tricky about things like the order they cash/bounce when you overdraw. 5, location can be an issue if you're not mobile. There's probably more than this too; these were just off the top of my head.
Re:How is this legal? (Score:5, Interesting)
Here's another one:
If you're low-income, you could live in low-income housing. Which, for reasons related to abuse of the system (think about Steve Jobs' $1 salary and apply that to someone with absolutely zero shame), is not based on your actual income (cash flow), but is instead based on your net worth including savings. But it has the effect of making low-income housing dwellers either A) not save anything and never improve their lot in life, or B) save, but keep it under the mattress because keeping it in a bank makes it traceable and will get you kicked out of your home.
I have a friend that lives in low-income housing, and he fits into scenario B. He makes probably $15k/year and definitely needs the low-income assistance. His savings is a wad of cash, locked up in a box in his closet. If he put it in a bank, he wouldn't qualify to have his apartment. But his savings isn't near enough to live anywhere else and his income is still low. He'd be homeless.
Re:How is this legal? (Score:5, Interesting)
About low-income people and bank accounts --- in many cases, they don't have one because they don't want to accumulate more than $2000. In many states, that's the asset limit for Medicaid. So if you go over that limit, you have to pay all your medical bills. So people get into the habit of living hand-to-mouth and never save any money.
In 2014, the asset limit for Medicaid disappears! So theoretically, people will be able to open bank accounts and start saving up money. But after all these years of not saving, I don't expect any sudden shift to people being smart about money.
Re:How is this legal? (Score:4, Insightful)
If your credit score if bad enough (as can happen when you don't have enough money to make ends meet), you may only qualify for 'special' bank accounts with significant fees attached. Being poor can be very expensive in the U.S.
Re:How is this legal? (Score:4, Informative)
In a lot of cases, you can't, even if there's a branch conveniently located nearby. I've seen banks that would charge a fee to cash a check drawn against that bank, because the check casher didn't have an account at that bank.
Re:How is this legal? (Score:4, Insightful)
Actually, my union threatened strikes unless we were paid equally for equal work. They also cut out the effective overtime without pay that was going on (you must be available on cell at all times), and stopped the fire-rehire on lower contract that was threatened.
But, you know, your stories are good too.
Re:How is this legal? (Score:4, Interesting)
While unions have a potential upside for some workers, in an unregulated fashion, just as corporations, they will expand and abuse their power. In non-right to work states, this is very prevalent. Unions in such states have become mafia run organizations, bullying business for more contributions and bullying workers to participate and pay into these unions. They play both sides of the isle because they can, not helping either.
The point is Unions, unchecked, are no better than any other organization competing for your money and tend to lead to worse market conditions.
Re:How is this legal? (Score:5, Insightful)
Re:How is this legal? (Score:5, Informative)
and my union negotiated away double time overtime in favour of time and a half in exchange for union dues being deducted from the lump sum signing bonus...
But, you know, your stories are good too.
I thought (Score:3, Interesting)
Most companies switched to direct deposit by now.
Re: (Score:3)
Re: (Score:3)
In some cases even direct deposit (no fee for the deposit ... the account holder's fees are the same whether pay is direct deposited or not and in some cases banks reduce fees if you sign up for direct deposit) is not an available option. It costs the employER to do direct deposit, while the banks are making these card scams cheaper or free to employERs. But I bet the bank CEOs don't get their pay on these cards.
article missed some points (Score:5, Informative)
The NYTimes talks about the fees that come along with the use of a preloaded debit card, but in some states (e.g. California), there is a legal requirement that the employee be able to get their pay without any fees, etc. , and at a location convenient to them. No paycheck drawn on a bank in some other state with only 3 branches in that state, etc.
Mind you, that doesn't mean that employers actually follow the rules, or that the employees, who typically are spending all their time just staying alive, will pursue this with the Dept of Labor Standards Enforcement, but at least it is the law.
Wage Theft (Score:5, Insightful)
Tell me again how it is the employee's responsibility to defray the employer's payroll processing costs?
Re:Wage Theft (Score:4, Insightful)
I had a former employer that decided to cut direct deposit in order to cut "defray unnecessary expenses" for the 8 employees at the company. Apparently direct deposit was costing about $1 per employee every other week for payroll.
That was also the week that I started to look for a new job. Shortly thereafter, the company let everyone go.
Saint Peter don't you call me 'cause I can't go (Score:3, Insightful)
Re:Wage Theft (Score:5, Insightful)
You are not paid by your employer, that's an economic fallacy. You, as an employee, add some amount of value to the goods and services provided by the company, and *that* is where your pay comes from.
I don't see how that is an economic fallacy. The employment contract I have says that the company will pay me $DOLLAR_AMOUNT on twice monthly basis and in exchange I offer my time and knowledge to them a JOB_TITLE. There nothing in the contract that says that my pay is contingent upon the company selling product or being profitable. In fact most start-up companies gamble that the employees they hire will ultimately allow them to be profitable which breaks the equation you have.
Also, there are a lot of jobs at a company that do not directly contribute to the profitability of the company via the goods and services offered but in fact are part of the sunk cost of doing business. For example, accountants generally don't generate goods or services that generate profits for the company, but ultimately, you are going to be a tough spot if you try to run a company without accountants managing your books.
State of Oklahoma as well (Score:5, Informative)
This frustrated me this year. I received a pre-pair card from the State of Oklahoma for my OK Tax Return. I swear I filled out the direct deposit info, but perhaps I didn't (I could check my copies...). What upset me is the fees for funds withdrawals/etc. This is my money, the state and its corporate partner shouldn't be making money off me when I try to get it.
The card did allow a single withdrawal without a fee at an ATM. I couldn't find an ATM it would work in. Finally logged in to the associated website and transferred to my banking account, with a $0.75 fee. What a crock!
Here's the Oklahoma website pdf detailing the info: http://www.tax.ok.gov/it2011/RefundCard.pdf [ok.gov]
and their FAQ: http://www.tax.ok.gov/faq/faqDEBITCARD001.html [ok.gov]
Re:State of Oklahoma as well (Score:5, Insightful)
This is my money, the state and its corporate partner shouldn't be making money off me when I try to get it.
I just wanted to interject this: conservative or liberal, I hope we can all agree that big business colluding with big government is often times a recipe for bad things to happen.
Re:State of Oklahoma as well (Score:5, Funny)
Republicans are for big business (as is some democrats), Democrats are for big government (as are some republicans). You mix 40-60% of each and get this result: big business colluding with big government.
You want different results, try a different recipe, vote Libertarian.
Already in the courts (Score:5, Informative)
No, it's a franchisee getting sued. (Score:5, Informative)
McDonald's is NOT being sued. McDonalds has nothing to do with employee payroll processing in individual restaurants. The franchisee pulling this stunt is the business getting sued.
Re:No, it's a franchisee getting sued. (Score:5, Insightful)
When I'm in the car and want some cheap, fast, gut-filling goodness, do I say to my wife "Do you want to stop at McDonald's?"
Or do I say "Would you like to stop at that individually-franchised restaurant-like business that happens to have a McDonald's sign attached to it?"
Just sayin'.
Perfect is the enemy of good. (Score:5, Insightful)
The check cashing services are also closely allied with the pay day loan services that charge interests that work out to something like 240% on annualized basis. These check cashing services are one of the main opponents of Wall street reform, they are very well organized and media savvy. I would not be surprised if this sudden interest in prepaid card fees and the media blitz is actually organized by these loan sharks.
It costs money to process these transactions. It is not as much as the banks charge as fees and the fees can be unreasonably high. But still that is not as bad as what these check cashing services charge. I would rather work towards giving the regular banks some tax incentives to provide these prepaid cards without fees when they were given as wages for people below poverty line. Killing the whole idea of prepaid cards or demonizing the employers who provide them will prove to be very counterproductive.
Please educate yourself about the plight of the poor at the hands of check cashing services on one hand, checking account with fees on the other hand, people not having fixed addresses or visas who can not open bank accounts in the first place before jumping on the band wagon denouncing the wage card with fees or the employers who provide them.
Re:Perfect is the enemy of good. (Score:5, Informative)
The system of prepaid cards with fees is not the perfect solution for poor workers. But it is better than the old system of paying them with checks. Free checking is not available in most banks.
Then why not fix that problem? You also enable poor people to pay bills electronically, buy things online, etc.
British banks have to* offer a "basic bank account", which has no fees (as normal in the UK) but doesn't allow any borrowing, and so doesn't require a credit check. If you have a valid identity document, and don't have "multiple convictions for fraud", you can get one: http://www.moneysavingexpert.com/banking/basic-bank-accounts [moneysavingexpert.com]
It's not that well publicised. For a while, I lived with some Eastern European immigrants in a cheap flatshare in London. They were keeping cash under the bed, but they all were able to open a basic account.
*As is often the case in the UK, instead of a law or regulation the industry is doing something on the understanding that if they didn't, there'd be a regulation, and it'd be worse for them.
Re:Perfect is the enemy of good. (Score:5, Interesting)
Re:Perfect is the enemy of good. (Score:5, Insightful)
Free checking is not available in most banks. Even when there is an allegedly "free" checking account it comes with a large minimum balance requirement.
Please educate yourself about the plight of the poor at the hands of check cashing services
Seen from Europe, the US banking system looks somewhat like the US infrastructure, that is: having missed quite some long-due overhauls.
Well two problems with that (Score:5, Informative)
1) You can, indeed, get free checking from Credit Unions pretty easy. Some banks too. There really are places that'll do business with you for no money up front and they won't charge you fees so long as you don't do things like overdraw.
2) They say companies are trying to do this instead of direct deposit. DD costs companies next to nothing. The Automated Clearing House (which is how they all do it) charges $0.35/transaction. This is why companies like to pay people that way. It adds just a trivial cost, and it all automated, the money comes out of their account in to yours. Well the only reason to go prepaid cards instead would be because the bank is bribing them, not because it is cheaper because the ACH cost is just fucking trivial.
This is not a matter of being nice to poor employees, this is a matter of fucking people over.
I could certainly understand offering it as an option. Maybe some employees would find it convenient or financially advantageous. But trying to force people on it? That is just trying to screw them over for a very minor benefit. Like I said, ACH is $0.35/transaction (or 0.06% of a minimum wage paycheck, not counting payroll tax and all that jazz if you want to look at it that way) and it is good bookkeeping wise since the transaction hits right away so you know the status of your current accounts.
Re:Perfect is the enemy of good. (Score:4, Interesting)
Um I worked in banking all though College part time for 7 years (day off for half saturday work to get all my homework done). Every Bank i worked at had free checking with 0 min balance.
Maybe it's a state thing, but NY i'm pretty sure every bank has to offer a free checking account, no min balance (maybe $100 to open but you can go to $0.01 without penalty/closing it).
Also, why do people still use banks, use a credit union. Better terms/fee's/interest rates/etc. Don't know why people are still using banks.
Next, most of those cards have free use. Free wherever mastercard/visa is. If you want the cash, you can go to banks that do credit card advances, and get the cash most times.
Someone posted about OK's tax refund from their website:
You can use the card anywhere MasterCard is accepted. At the gas station, grocery store, department store, on-line store and many more. You can also take the card and PIN number to any bank or credit union that accepts MasterCard and ask the teller for the full amount of the card balance in cash or deposit it into your checking or savings account. You can also withdraw funds from the card free of charge from any MoneyPass ATM location in Oklahoma.
I know in NY NY issues benefits for Workers Comp/Disability on Master Card state cards. They would come in and withdraw the full amount without fee's.
Re:Perfect is the enemy of good. (Score:5, Informative)
Performing any transaction other than an in-person sale via cash is *heavily* discouraged in the US, for a variety of reasons. For one, the government frowns on it because it is a great route for money laundering and tax evasion. Paying people's wages and salaries in cash has been close to non-existant for decades.
Well, wait... (Score:5, Interesting)
Ostensibly, this is a means to help folks who don't have a bank account to carry electronic money around. In some cases, it's on the up-and-up; many of these cards charge monthly fees that are lower than what, say, Bank of America will weasel out of you on a monthly basis. I had a NetSpend card for awhile as an experiment of sorts, and it worked out very well... enough to get me to drop my old BoA account for about a year, until I found a credit union that better suited my needs.
OTOH, many of these cards are shady as hell, and little wonder some employers push them - the kickbacks have got to be extremely tempting, to say the least. Then again, many banks are just as bad, if not worse.
Long-term, I see it as an overall move towards ditching cash altogether - the poor are the last barrier to such a society, and these card programs are aimed squarely at them. Most are unable to get a bank account (bounced checks, etc), they often get state assistance nowadays in the form of debit cards now. OTOH, cash has a wonderful way of getting paid without the IRS knowing about it, so I can see government's angle in wanting e-money over the regular stuff. Cash also makes it hard for police to track money flow, etc... so yeah, I can see the allure from that viewpoint. I can also see the allure of not having to print and distribute paychecks from the employer's end.
All that said, I wonder how long it will be until cash is done away with altogether, and what the drawbacks to society will be from doing so. Cash is a beautiful means of buying things without the purchase being tracked (and yes, most times it is not only legit, but done for good reasons), and it has the advantage of being accepted pretty much anywhere (even if you have to convert currency first. Finally and most important, cash doesn't require a transaction fee every time it gets used - way too much room for abuse and corruption there.
There are already lawsuits over this practice (Score:5, Informative)
This one makes the point well.
http://consumerist.com/2013/06/17/ex-mcdonalds-employee-sues-because-she-doesnt-want-her-paycheck-on-a-prepaid-debit-card/ [consumerist.com]
survival of the least stupid (Score:3)
Re: (Score:3)
Bank fees (Score:5, Informative)
Re: (Score:3)
Well, it does actually cost the banks *something* to securely and reliably process transactions, so if they don't charge for that then they are cross-subsidising, which some people object to even more.
I like 'free' banking in the UK, long may it continue, but the money to run my account is almost certainly NOT being covered by interest my bank earns on the contents of my current ("checking") account, so somebody else is likely subsidising me, quite likely someone poorer than me that keeps being stung with d
Who's liable for a compromised card? (Score:3)
So.. if this is anything like a real Debit/Cred card, the same security holes would seem to apply. Holes you wouldn't have with paper check or direct deposit. When my paycheck has been spent and I didn't make the withdrawl, who is going to believe me?
nothing new, same old shit is spreading (Score:5, Interesting)
It started with some states, getting rid of both checks and direct deposit for unemployment benefits. Yeah, you get your card, and there's some way to get some cash for free, but there's all sorts of limits and restrictions. You either use it to buy stuff so that the merchants end paying the issuing bank, or you get your cash to your checking account in one payment and it costs you.
As an employer I can attest that payroll services have been pushing this on me hard since at least 2008. They're obviously getting a commission, or they would not be promoting it so aggressively. My default is always direct deposit, but I do pass along the paperwork for the debit card to new hires--this results in a blank uncomprehending stare as they process the idea; "why in the hell would I want to do that???" ;-)
If the banks could charge us fees for paying in cash, they would. From their point of view this is the next best thing.
Bof A, Wells and JP Morgan (Score:5, Insightful)
Please don't tell me these organizations aren't stocked to the gills, from head to tail with sociopaths. It's long past time we stop spending money to bail them out, undo the damage in other people's lives they've done, and in this case spend time writing new legislation to stop them from doing something they know perfectly well they should not be doing - exploiting the lowest paid workers in society for everything they can , until the Congress gets around to making it illegal.
It's so outrageous and such an egregious evacuation of all moral responsibility you have to ask yourself is it just a money grab until Congress acts or is it deliberately designed to provoke the legislation-reaction and designed to be used as a bargaining chip, something their political allies in Congress can use to bargain in exchange for some other , less immediately outrageous but more systemically poisonous , "deregulation".
The whole issue is virtually made-for-Democratiuc moral outrage and gives the Republican something to "trade away", something for the Democrats to parade around as a victory and all the while Wells Fargo, Goddamn Sachs and Bunch of Assholes are gorging themselves in their box seats watching their favorite blood-sport, raping the poor and defenseless.
Don't doubt for a minute is the META level the 1% thinks at, this is exactly what preoccupies them. When what you personally decide to do or not do results in legislation, then that's something worth considering the implications of. Of course, you and I don't spend time doing that because what we decide to do this morning doesn't result in legislation, but if for some reason it did, it wouldn't be long until you understood that you have the power to create horses for the horse-trading bazaar Congress ultimately is.
That is, when Congress is working at all.
I would go further and say that instituting these fees is an example of collusive signalling between banks. One does it and the others see. Each knows internally it's going to be legislatively forbidden soon enough. They recognize in it a Congressional bargaining chip, as do members of both political parties who know how to hit a softball when one is lobbed at them.
No one has to say anything explicit to anyone. Someone makes a move and everyone else follows on. From a certain, naive perspective, it's market based response, a decision to enter a profitable market on the part of competing players.
In reality it's an play to influence legislation on another, much more potentially profitable issue . No one can prove anything. There was no collusion to be proved (and we all know what high standards for proof the DoJ has for the coke snorting class ) and no one is coordinating to do anything.
I don't buy it. This goes well beyond the mere presumed sociopathy of Lloyd Blankfein and Jamie Dimon and their henchmen. I smell a too-stinky rat. Far far too stinky.
Re: (Score:3, Insightful)
Weekly? Bi-weekly seems to be the most common in the US.
I've been thin for cash during that second week enough times, I can only imagine how much worse it would be to go a whole month.
Re:Weekly/Monthly Salary (Score:4, Informative)
As someone who gets paid once monthly -- it's not that bad, once you get your budget set up. I get paid on the last day of the month, unless that is a weekend, in which case I get paid the Friday before. I have *most* of my bills set to be due on the 5'th, so I get them all out of the way right up front. I have a few that are due around the 20'th, but since they are stable (IE: they don't change), it's easy to budget around them.
Re:Weekly/Monthly Salary (Score:5, Interesting)
I should have mentioned -- I'm also paid via direct deposit. If my 'default' pay were via one of these crappy cards, I'd do *whatever* paperwork was needed to get a normal check or direct deposit...
Re:Weekly/Monthly Salary (Score:5, Interesting)
Re:Weekly/Monthly Salary (Score:5, Insightful)
I switched to a credit union in 2010 after I got fucked over by S & T Bank. My credit union charged me $10.00 for membership.
If you're in a bad financial situation, it can be hard to come up with a spare $10.00 but isn't that better than getting charged $4.00 EVERY TIME you want to access your money?
Yes, being poor sucks. But at some point, you have to start making decisions with an eye towards the long term.
LK
Re:Weekly/Monthly Salary (Score:5, Informative)
Yes, that $10 (which at most CUs is refundable when you close your account) is better than being charged $4 every time you want access to your money, but a lot of poor people simply don't think that far ahead, and have zero financial management ability whatsoever. I've seen it with people I've hired for domestic duties; they use check-cashing stores for absolutely everything.
Re:Weekly/Monthly Salary (Score:5, Insightful)
Re:Weekly/Monthly Salary (Score:5, Insightful)
With all due respect sir, you don't know what my life and upbringing were like.
I've been luckier than many. Perhaps in some ways, I've been luckier than most. However, I have faced more than my fair share of hardship.
These are not perpetual infants that we're talking about. These are people who are presumably adults and are responsible for their own decisions, rational or not.
At some point, we become responsible for ourselves.
LK
Re:Weekly/Monthly Salary (Score:5, Insightful)
No, of course not, but for several reasons. 1) You really don't want to get too entangled with people that have that many problems in life; from what I saw, many of them had constant drama of some kind going on in their lives: relatives going to jail, relatives getting maimed in drug deals gone bad, one housekeeper even had a nephew who raped and murdered a small girl. And 2) they wouldn't know what to do with a CU account. These people operate solely on cash; keeping money in a bank is a foreign concept for them.
Yes, to an extent, people are responsible for themselves and their own decisions, but as a society, it's our (collective) responsibility to educate all our members so that they can function in a modern society, and American society is failing miserably in that regard. These basic life skills like having a bank account and managing money should be taught to kids in grade school and high school, and obviously that's not happening. I had to learn all that stuff on my own, which isn't so hard when you grow up in a middle-class household with a parent who already understands these things (my mom took me to get my own bank account (savings of course) when I was about 10 years old; this was back in the good old days of the 80s when banks didn't charge fees for every little thing), but if your parents don't understand this stuff at all, you're screwed in this society because no one's going to teach you. However, now with even poor people using the internet, maybe things will change because all this stuff can be easily looked up and read about.
Re:Weekly/Monthly Salary (Score:5, Interesting)
Right... this is the whole strong helping the weak philosophy at play here. My only statement is that the weak need to remember it's a choice for the strong to help them, not a right.
What you'll find though is pride gets in the way, when I was younger I did try to help people I didn't really know that well only to get "who is this guy and why does he thing he knows better" type attitudes / responses.
So... as a result, call me a terrible person, but I leave people to their own problems now no matter how basic, I have my own to deal with.
And when I read something like TFA, I immediately flag atm fees and know that I would mitigate them (my bank has free atm withdrawals at their atms), but passing that knowledge on? Words to the wind.
Re:Weekly/Monthly Salary (Score:5, Insightful)
This is The United States of America. How dare you expect anyone in this nanny-state to be responsible for their own decisions, good or bad. If you make good decisions and manage to claw your way up to the upper echelons of society, you need to pay your fair share. And if by some chance you are aren't one of the lucky few, then by god, the Federal govt will take care of you. Because bad decisions are never based on your decision making shares, but it must be someone elses fault.
Re:Weekly/Monthly Salary (Score:5, Insightful)
Re:Weekly/Monthly Salary (Score:5, Insightful)
Re:Weekly/Monthly Salary (Score:4, Funny)
I've long felt that schools have been doing a disservice to pupils since the 70's; preparing grade school kids for life should include basic money management, awareness of the state and federal tax code, family law, and the penal code. It takes an education to understand the responsibilities society places on you and the consequences of ignoring them, yet we toss our kids to the wolves as soon as they complete primary without any of that. Its really rather silly.
If you got rid of Reading, Writing, Arithmetic, History, Science, P.E., and Recess we might be able to cover the U.S. tax code in K-12, although it would be woefully outdated knowledge by the time they got to college. If we started sending every kid to summer school it would make a dent in the rest of the Federal statutes. States would have to do their own statutes as extra homework and weekend sessions. I have no idea when country/city ordinances would be covered. Good idea, though.
Re:Weekly/Monthly Salary (Score:4, Interesting)
I don't know if you've read Rand, but that's not quite what she says.
It is perfectly alright for one to help others according to Rand. The only condition is that you do it with consideration for your own benefit. The thing most people miss is that this benefit does *not* need to be material. You can help someone because it makes you feel good. That's entirely valid according to Randian principles on the condition that you value that good feeling more than the cost of said help. That is compatible with your Gandhi quote, btw.
- OK with Rand: Giving 20 bucks to some homeless guy because you want to.
- Not OK with Rand: Giving 20 bucks to some homeless guy because his condition somehow *entitles* him to your help.
- Definitely NOT OK with Rand: Some thug(s) using force or threat of force to take that 20 bucks from you and handing it to an arbitrary group of bums they feels deserves your help. Typically as a selfish political strategy to maintain and increase that ability to use force.
Re: (Score:3)
I've never heard of it until this morning when I read it on Slashdot. If an employer tried to pay me with these, I'd laugh in their face.
Re: (Score:3)
We're presumably not in the kinds of jobs where this would be happening. People being paid through that method may not have the option to take a principled stand by bursting in to laughter before nipping home for a glass of Grey Goose.
Re:Weekly/Monthly Salary (Score:5, Informative)
Quite true! Once you find yourself in ChexSystems (I think that's what they're called), you're blacklisted from all traditional banks.
But then, hardly anybody takes checks anymore, and those that do often process them electronically on the spot, eliminating much of the "benefit" of checks for poor people (namely, "floating" checks a few days before you get paid when you don't have the balance to cover it.)
I was young and poor once. Juggling checks so I could get by without bouncing any is an art all its own, and a much harder one to accomplish nowadays.
Re:Weekly/Monthly Salary (Score:5, Interesting)
I remember when they started this....I thought it was a great thing to see checks clear instantly. Then i realized, banks still kept their "hold" on the money. So it was the worst of both words, the check writer has no float time, AND the person cashing it still has to wait that whole float time. Basically, the banks stole the float time for themselves.
Re:Weekly/Monthly Salary (Score:5, Informative)
and the banks have fun with the float time. If they see a check come through for a high amount that can drain the account, it will go through fast. Instead of one bounced check, that big one magically finds its way to the front of the line so that all the little checks that had not cleared yet have insufficient balance.
Re:Weekly/Monthly Salary (Score:4, Informative)
The Nigerian scam still works on this principle. They send you a check drawn from a foreign or at least out of state bank. You deposit it and the check clears. One business day later all of the funds are available. If you're stupid enough to send them the money, when your bank finally figures out that the check was worthless, they back-charge your account. You end up several thousand dollars negative that you have to repay out of your own pocket.
Despite the instant clearing, this process can sometimes take 8 weeks to play out.
LK
Re: (Score:3, Insightful)
Short of that, they may just offer "no fee" transactions at certain stores, while charging noticeable ($2-5) fees at any other location. They don't have to ban the cards from specific stores, just give you an incentive to shop at one specific store.
Re:Weekly/Monthly Salary (Score:5, Insightful)
Re: (Score:3)
Re: (Score:3)
It's not hard. Really, unless you're saving absolutely nothing, you should have enough of a cushion to be able to spend into that in advance of the paycheck. If you budget properly, the dint in your savings is only short-term.
I get paid monthly; it goes into my mortgage, and I transfer out a weekly sum for day-to-day needs. I pay my bills straight from the mortgage.
Re: (Score:3)
These cards are usually given to people who are working paycheck-to-paycheck for not much money. Going an extra couple weeks (or even just one week) without getting paid can be the difference between eating and not eating.
Your setup where you withdraw from your mortgage is a luxury that I would say most people--especially those who are most likely to be offered payroll debit cards--are very unlikely to have access to.
Re: (Score:3)
The GP wasn't talking about payroll debit cards; he was talking about the difficulties of a monthly pay-cycle versus weekly/fortnightly.
Re: (Score:3)
uh.. just live lighter for 4 weeks.
I think US companies just like to spend more on unnecessary paperwork.
monthly and directly to bank account is the norm over here.
Re:Weekly/Monthly Salary (Score:5, Informative)
The benefits to monthly payroll are purely for the employer- they don't have to spend as much processing payroll since it happens half as often, and they can earn more interest on the money before giving it to you.
By this argument, everyone ought to get paid daily, assuming banks calculate interest daily where you are. At some point, it just becomes absurdly inefficient.
Paying monthly in arrears is the standard for salaried work here in the UK, and since most household bills are also monthly and the related government tax calculations tend to be monthly, everything lines up just fine.
And it's not your money they're holding on to, if your contract says you'll be paid monthly in arrears. It's theirs until payday, in black and white. If you don't like that, negotiate yourself a tiny payrise or something to compensate for your lost interest.
By the way, you're pretty much wrong about the whole interest-earning thing for businesses as well. Here in the UK, businesses earn about 0.1% annual interest rates on money in most bank accounts. The amount they save by deferring salary payments to monthly instead of some more frequent interval is negligible. The saving is in halving the admin overhead (relative to fortnightly payments) and making fewer financial transfers (for which banks will charge a fee).
Not for hourly workers they don't. (Score:5, Informative)
I worked at one time where I was paid with one of those cards.
We were paid weekly because we were peon min wage packers.
It was free to transfer to a bank account. There were no fees if we kept a balance - I moved my money out of the card as soon as the company deposited money into it because I didn't trust them.
Anyway, I don't have the fee schedule in front of me to make further comments about the particular card I have.
But the point is, peon min wage jobs pay weekly.
That was a shitty job. You had to show up over an hour before you could even clock in with the hopes of getting selected to work that day. If you got selected, you were able to go to the head of the line the next day. If you had to take a day off, you lost your spot and back in line.
If you weren't selected, you just spent you morning -5AM - 6AM waiting around for no pay. A lot of folks got discouraged and never cam e back after a couple of days waiting around and not working.
The body shop that brought the workers in was ALWAYS recruiting more and turning away more in the mornings - it was retarded.
They would train people on a machine, and the operator would work for a month or two, and then when business dropped they would not call anyone into work.
There were many times as a machine operator where if you still needed to work, they would demote you and you were back to min wage loading machines or packing games.
And when business was slow, no work at all.
And then after work, you had to stand in line for about a half hour - UNPAID - in order for security to search you to make sure you're not trying to smuggle out a video game.
So, you would spend at least 90 minutes a day at the plant unpaid.
Don't like it, you don't have to work there.
And the treatment by the company! It was clear that you were crap. Nothing. That you could be replaced at ANY time - and it was true. There are so many desperate people WANTING to work - contrary to what the conservative pundits say -that they can replace you at ANY time.
The poor are treated like garbage in this country. They are treated as subhuman. And when you're constantly treated that way you start to wonder if it's true.
We, the US, are a class based society - with very little mobility. And if you fall off your rung on the ladder, good luck getting back up it's nearly impossible. Just try saying in an interview - if you actually get one - "when I was out of development work, I worked a min wage job 11 hours a day."
And the industry still expects you to keep your skills up having to live that way.
Re:Not for hourly workers they don't. (Score:5, Informative)
too bad you do not work in a state that protects workers. here you document your time and turn it in to the labor board. They get fined and forced to pay you 2X your pay for that missing time. they CAN NOT LEGALLY make you clock out to be searched by security.
Re:Not for hourly workers they don't. (Score:5, Insightful)
I'm saddened by this story, but not shocked. The fact that I'm not shocked makes me even more sad.
Re: Weekly/Monthly Salary (Score:5, Insightful)
Sometimes you need a bootstrap. People in low-wage jobs often run on razor thin budgets. Imagine you have no money and have to get a job and still come to the job dressed and clean. That's a real issue, not something made up.
Re: Weekly/Monthly Salary (Score:5, Insightful)
Was poor once.. it sucked. You get sick more often, meaning you get more bills and miss more work because you can't afford good food. I have been clawing my way out of the hole for many years now. Almost 50% of my gross income goes to paying debts, which are mostly medical, school, car, and credit debts from not having enough money to eat so I used my credit card to not starve.
I've learned to not judge people, they tend to be victims of their own circumstances.
Re: Weekly/Monthly Salary (Score:4, Insightful)
I find vegetables and fruit from the local market cost less than just about any other kind of food. They definitely count as good food.
If I'm trying to save money I'll buy whatever is in season and going cheap and look up recipes on supercook.com where you can search by ingredient.
Cooking isn't a dead art yet :)
Re: Weekly/Monthly Salary (Score:5, Insightful)
I find vegetables and fruit from the local market...
http://en.wikipedia.org/wiki/Food_desert [wikipedia.org]
Stop talking like everyone shares your privileges.