Paycheck by Debit Card

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GloriaInTX's picture
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Paycheck by Debit Card

Should an employee have a choice in the method that they receive their paycheck?

In a handful of cities, some fast-food workers have protested in recent months, agitating to have their pay nearly doubled to $15 an hour. But Natalie Gunshannon wasn't one of them. A McDonald's worker at Shavertown, Pa., just 24 miles from Scranton, she says that she initiated a class-action lawsuit against the McDonald's franchise for a simple reason: "I am looking for the pay I am owed."

Hired on April 24, Gunshannon discovered that the Shavertown McDonald's franchise pays workers only with JPMorgan Chase debit cards -- and requires workers to cover the debit fees, according to a report by CitizensVoice.com, a local news outlet.

Gunshannon reportedly was to be paid $7.44 per hour, a little more than the minimum wage. But as the TimesLeader.com reports, the payroll card had several fees, including $1.50 for ATM withdrawals, $5 for over-the-counter cash withdrawals, $1 per balance inquiry, 75 cents per online bill payment and $15 for lost or stolen card.

Gunshannon asked the franchise owner's office if she could be paid by check or direct deposit, and was told no. So the 27-year-old single mother of one refused to sign the debit card, quit and contacted a lawyer, who filed a class-action suit on Thursday. "I can't afford to lose even a few dollars per paycheck," Gunshannon told the local paper.

Mike Cefalo, her attorney, told the TimesLeader that the franchise's action was another case of "corporate greed" and a violation of state law, which gives workers the choice to be paid by check or cash. The lawsuit seeks unspecified monetary and punitive damages.

A spokeswoman for the franchise told news organizations that it hadn't seen a copy of the suit yet, but stressed "we value our employees" and "we are committed to providing them the best possible work environment."

According to ADP, a well-known payroll processor, payroll debit cards can benefit workers who don't have bank accounts. "If you don't have a bank account you must often rely on the expensive check cashing stores," ADP says in its literature, adding debit cards are more secure than carrying "large amounts of cash, which can be subject to loss or theft."

In 2012, the Consumers Union and National Consumer Law Center created guidelines for using these payroll debit cards. Top on their list: "Employees must be able to access their full wages, at least once each pay period, without cost."

McDonald's Sued Over Paying Workers With Debit Cards - Careers Articles

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Gunshannon reportedly was to be paid $7.44 per hour, a little more than the minimum wage. But as the TimesLeader.com reports, the payroll card had several fees, including $1.50 for ATM withdrawals, $5 for over-the-counter cash withdrawals, $1 per balance inquiry, 75 cents per online bill payment and $15 for lost or stolen card.

Gunshannon asked the franchise owner's office if she could be paid by check or direct deposit, and was told no. So the 27-year-old single mother of one refused to sign the debit card, quit and contacted a lawyer, who filed a class-action suit on Thursday. "I can't afford to lose even a few dollars per paycheck," Gunshannon told the local paper.

Mike Cefalo, her attorney, told the TimesLeader that the franchise's action was another case of "corporate greed" and a violation of state law, which gives workers the choice to be paid by check or cash. The lawsuit seeks unspecified monetary and punitive damages.

I would be seriously pissed! I agree with her lawsuit and hope McDonald's has to fix this problem.

GloriaInTX's picture
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I agree I think they should have an option to get a check or at the very least be able to transfer the balance into your checking account for free. I didn't even know employers did this until my son worked for Cinemark a few years ago and they did the same thing. I do think he was at least able to get his money out without paying fees though, but I am not positive. It wasn't as big a deal for him at the time because he was still in high school when he had that job and didn't have his own bank account, so I'm not sure if he had a choice or not.

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I think that's the weirdest thing I've ever heard and I've not known of anyone personally that is paid in debit form. Checks and direct deposit only.

I am glad she sued and I hate lawsuits. You should not have to pay large amounts of money to access your pay.

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I wouldn't mind it being offered as an option ~ I agree that it is WAY kinder than making people go to check cashing places where they get ROBBED, I mean, theoretically they only need pay $1 or whatever to pull out all of the money on the card, which is nothing as compared to the huge chunk the check cashing places take. That said, and especially if it is not in compliance with state or federal laws, having it be the only option is unfair and illegal and hopefully the lawsuit will bring an end to it. Also that being said, I would hope that the lawsuit is not seeking damages (ie is not punitive ~ in PA that would be very hard to get)....but merely is seeking to end the unfair practice. Personally I think that she was foolish to quit her job over it, presuming she needed the job. That doesn't make sense to me, but what do I know.

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"GloriaInTX" wrote:

It wasn't as big a deal for him at the time because he was still in high school when he had that job and didn't have his own bank account, so I'm not sure if he had a choice or not.

This absolutely blows my mind. Why wouldn't your son have a bank account? My kids have bank accounts, I got my first one when I was 5. Many banks and credit unions give free accounts to children, this is a fantastic way for kids to understand money. Is it illegal to have one under 18 where you are?

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I hadn't thought about that. My kids have bank accounts too and they're 5 and 9. My dad took us all to get our own accounts when we were little. . .omg I remember that I'd saved up to start mine: $1.14. Opening balance. lol

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My kids have savings accounts now and have since they were just babies. I had a savings account and then I opened a checking when I got my first real job at 16.

ClairesMommy's picture
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I tried to respond yesterday but :shrug: don't know what happened! Yeah, about the bank account thing. I don't quite understand someone not having a bank account if they are gainfully employed unless they're trying to dodge some collector. Then again, that's what garnishment is for. Still, that can take some time to catch up to a person - getting their wages garnished.

I've had a bank account since I was like 5. My kids have had one together since Ben was born. I didn't have to put any big chuck of cash into their account when I opened it. I actually don't remember if I had to put anything in though I'm sure I did. Learning how to bank and seeing an account balance fluctuate (and mainly GROW) is important, I think. Yeah, there are fees and stuff but such is life. Not many free services out there, unfortunately.

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Our savings accounts for the kids are free and our checking account is free. Go credit unions!

SID081108's picture
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My company offers the debit card option although it is only used by a few of our 1400+employees. I think it's absolutely crazy to offer it as the only option.

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"blather" wrote:

This absolutely blows my mind. Why wouldn't your son have a bank account? My kids have bank accounts, I got my first one when I was 5. Many banks and credit unions give free accounts to children, this is a fantastic way for kids to understand money. Is it illegal to have one under 18 where you are?

I'm glad you had that luxury. A bank account doesn't do a whole lot of good if you have no money to put into it. When we were done paying medical bills and other expenses associated with his cancer we didn't have a lot left over to put in a bank account for him.

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My kids scrounge all the change they can find and put it in piggy banks too. They must have several hundred bucks each, what with the coins that grandpa and other relatives give them. Here we have one and two dollar coins, so it's easy to make a piggy bank add up to some serious cash. Smile

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"ClairesMommy" wrote:

My kids scrounge all the change they can find and put it in piggy banks too. They must have several hundred bucks each, what with the coins that grandpa and other relatives give them. Here we have one and two dollar coins, so it's easy to make a piggy bank add up to some serious cash. Smile

Maybe even $1.14.

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"freddieflounder101" wrote:

Maybe even $1.14.

Nope. We don't have pennies anymore. Smile You'd get that rounded up to $1.15!

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"ClairesMommy" wrote:

Nope. We don't have pennies anymore. Smile You'd get that rounded up to $1.15!

I forgot! The last time I was in Canada (January) they were still phasing them out. No more $1.14 bank accounts, how sad.

Back to the OT, I think it's ridiculous to pay people in a way that automatically charges them fees. It's really unfair.

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It seems so unusual to me. It makes me think there's a larger incentive at work as to why the debit cards are being used, and it's NOT for employee convenience.

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"GloriaInTX" wrote:

I'm glad you had that luxury. A bank account doesn't do a whole lot of good if you have no money to put into it. When we were done paying medical bills and other expenses associated with his cancer we didn't have a lot left over to put in a bank account for him.

So all of his earnings go directly to you to pay for medical bills? That's rough.

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"blather" wrote:

So all of his earnings go directly to you to pay for medical bills? That's rough.

Where did I say that? I'm pretty sure I said they went on the Debit Card that the employer used to pay him, and he was fine with that arrangement since he didn't have his own account. We just didn't have the extra cash to open an account for him before he got his own job.

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"GloriaInTX" wrote:

Where did I say that? I'm pretty sure I said they went on the Debit Card that the employer used to pay him, and he was fine with that arrangement since he didn't have his own account. We just didn't have the extra cash to open an account for him before he got his own job.

This doesn't make sense to me. My kids' accounts have about $13 in them right now. When I got my first job, I opened an account at the bank the check was drawn on with my first paycheck.

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"GloriaInTX" wrote:

Where did I say that? I'm pretty sure I said they went on the Debit Card that the employer used to pay him, and he was fine with that arrangement since he didn't have his own account. We just didn't have the extra cash to open an account for him before he got his own job.

This doesn't make sense to me. My kids' accounts have about $13 in them right now. When I got my first job, I opened an account at the bank the check was drawn on with my first paycheck.

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"GloriaInTX" wrote:

Where did I say that? I'm pretty sure I said they went on the Debit Card that the employer used to pay him, and he was fine with that arrangement since he didn't have his own account. We just didn't have the extra cash to open an account for him before he got his own job.

So he has a job and no bank account? This seriously blows my mind.

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Oh my gosh, people on this board get worked up about the most random things.

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"SID081108" wrote:

Oh my gosh, people on this board get worked up about the most random things.

I don't think anyone's all up in arms about Gloria's son not having a bank account. Some people think it's weird for someone with a job not to have one. I know it's hardly an isolated occurrence, but I will admit that it is, to me as well, kind of strange. But whatever. I will go out on a limb and say that nobody is losing sleep over other people's financial arrangements.

Back to the OP, I'm sure there are lots of kids who simply get a paycheque and sign it over to a parent, or they get cash once a week or even work under the table. Like, when I waitressed and bartended for many years I could have easily lived with no bank account. I could have cashed my cheque at the bank it was drawn on right across the parking lot and used that and my tips to pay for everything. I COULD have done that though it still would have been weird, IMO. How does one go about establishing a credit rating without a bank account?

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"ClairesMommy" wrote:

I don't think anyone's all up in arms about Gloria's son not having a bank account. Some people think it's weird for someone with a job not to have one. I know it's hardly an isolated occurrence, but I will admit that it is, to me as well, kind of strange. But whatever. I will go out on a limb and say that nobody is losing sleep over other people's financial arrangements.

It was his very first job and he was still in high school. He hadn't needed one before that. They paid him by debit card so he was fine with that while he had that job. He wasn't working that many hours anyway since he was still in school so it wasn't a lot of money. He got a checking account by the time he started his next job. Sorry I just don't think that is so strange.

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I don't think anyone's trying to change you mind about it, Gloria. Some of us think it's unusual. You don't. Why are you sorry?

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"ClairesMommy" wrote:

I don't think anyone's trying to change you mind about it, Gloria. Some of us think it's unusual. You don't. Why are you sorry?

Just seems like a strange thing to blow somebody's mind.

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"ClairesMommy" wrote:

I don't think anyone's all up in arms about Gloria's son not having a bank account. Some people think it's weird for someone with a job not to have one. I know it's hardly an isolated occurrence, but I will admit that it is, to me as well, kind of strange. But whatever. I will go out on a limb and say that nobody is losing sleep over other people's financial arrangements.

This "blows my mind" pretty much sums up being "up in arms" about something, IMO. I think it is crazy that people are acting like she locked her kid in the cage in the basement because he got a job without a checking account. Seriously, WHO CARES??

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"SID081108" wrote:

This "blows my mind" pretty much sums up being "up in arms" about something, IMO. I think it is crazy that people are acting like she locked her kid in the cage in the basement because he got a job without a checking account. Seriously, WHO CARES??

That seems rather extreme to me.

People are just surprised. Many of us opened bank accounts for our kids when they were young, with very small amounts of cash in them. It seems unusual for a teenager with a job to not have an account. That's all. I don't think anyone implied neglect! It just seems impractical when it's something that's easy to do and very useful.

That said, I can see someone choosing to avoid banks completely, and stick with credit unions. Banks are creepy. (I use them, though.)

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"ethanwinfield" wrote:

This doesn't make sense to me. My kids' accounts have about $13 in them right now. When I got my first job, I opened an account at the bank the check was drawn on with my first paycheck.

Seriously to me that wouldn't be worth the trouble of keeping up with an account that has $13 in it. I'd rather just open one when it was actually needed.

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"GloriaInTX" wrote:

Seriously to me that wouldn't be worth the trouble of keeping up with an account that has $13 in it. I'd rather just open one when it was actually needed.

What trouble is involved? You don't really have to do anything.

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"GloriaInTX" wrote:

Seriously to me that wouldn't be worth the trouble of keeping up with an account that has $13 in it. I'd rather just open one when it was actually needed.

Ummm...I didn't open them with $13 in them. I can't close that specific one because it is joint with her father and me. We both have to agree to close it or to take his name off. Thus, since he also has access to the money, there is $13 in it. When she receives birthday and Christmas money she deposits it into her other account. Also, I transfer both girls' allowance in to their bank accounts that they have debit cards attached to. It's automatic so I don't even have to remember and I never have cash to give them.

My mom has an account for them too. $25 per birthday and Christmas, $5 for Valentine's Day and Easter is $60/year. $1000 over 18 years isn't a bad.

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"freddieflounder101" wrote:

What trouble is involved? You don't really have to do anything.

No? It doesn't require going down to the bank to open the account, then keeping up with statements for years for an account that is not being used? I just don't see the point. If you don't use it how is that gaining them any practice in having a bank account? Just the fact that they have an account somewhere in their name that you opened for them magically teaches them how to manage money? If the kids are using the account and putting their money in it I can see having one... but just opening an account and sticking $10 or something in it for 10 years makes no sense to me.

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"GloriaInTX" wrote:

It was his very first job and he was still in high school. He hadn't needed one before that. They paid him by debit card so he was fine with that while he had that job. He wasn't working that many hours anyway since he was still in school so it wasn't a lot of money. He got a checking account by the time he started his next job. Sorry I just don't think that is so strange.

Can I ask what happens if the card is lost or stolen or skimmed? Or if there is a double-charge or other mistake (running it as $122 instead of $12). Does he have the same recourse?

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"GloriaInTX" wrote:

No? It doesn't require going down to the bank to open the account, then keeping up with statements for years for an account that is not being used? I just don't see the point. If you don't use it how is that gaining them any practice in having a bank account? Just the fact that they have an account somewhere in their name that you opened for them magically teaches them how to manage money? If the kids are using the account and putting their money in it I can see having one... but just opening an account and sticking $10 or something in it for 10 years makes no sense to me.

Actually, ING has been entirely online. Opened the account online, got a $50 bonus for opening the account, and never once had to mail, fax, or take any paperwork to a brick and mortar building. Come to think of it, the nearest branch of my bank is about 100 miles away. Haven't been to an actual branch since July of last year.

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"ethanwinfield" wrote:

Can I ask what happens if the card is lost or stolen or skimmed? Or if there is a double-charge or other mistake (running it as $122 instead of $12). Does he have the same recourse?

Honestly I don't remember. He didn't have that job for that long and it was probably 5 years ago.

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"GloriaInTX" wrote:

No? It doesn't require going down to the bank to open the account, then keeping up with statements for years for an account that is not being used? I just don't see the point. If you don't use it how is that gaining them any practice in having a bank account? Just the fact that they have an account somewhere in their name that you opened for them magically teaches them how to manage money? If the kids are using the account and putting their money in it I can see having one... but just opening an account and sticking $10 or something in it for 10 years makes no sense to me.

Nope. You can do it online. I'm not sure what effort "keeping up with statements" requires....typing something into a website?

Look, if it served no purpose for you then good on ya! For me as a kid growing up, I would save my money and put it into my account. (And that was back when there was no internet or online or even bank machines initially!)

Anyway I have always found it useful, which is why my kids have accounts. Right now I "manage" them and they are linked to ours and the kids aren't learning anything from them. But managing them, for now, means receiving statements or checking online. No real effort whatsoever. I move money into them from time to time from my account, which I can do through an app and it takes about 2 minutes.

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"freddieflounder101" wrote:

Nope. You can do it online. I'm not sure what effort "keeping up with statements" requires....typing something into a website?

My son is a little older. Online banking has progressed a lot in recent years. 5 years ago I wasn't even managing my own checking account online.

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I go to the bank, like never. Money goes in, bill payments come out, statements come electronically. The only time I ever go is when I get my medical expense reimbursement cheques in the mail. I can opt for direct deposit on those too, just haven't yet. I suppose we will have to go when our mortgage is up for renewal. Actually, our mortgage lady came to our house when we signed last time.

Also, I remember a story about a bank tracking down some distant relative of a guy who had a little bit of money in an account for a couple hundred years or something like that, maybe a few hundred bucks. Except by the time the bank found the account and tracked down the living relative the balance was in the millions of dollars, all thanks to the interest that had compounded. Smile I am going to do that - stash maybe a thousand bucks in an account - like a time capsule. Maybe it will be worth a fortune in another two hundred years and my decendants will be set up nicely for a while. Smile

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"GloriaInTX" wrote:

My son is a little older. Online banking has progressed a lot in recent years. 5 years ago I wasn't even managing my own checking account online.

I know! I still remember standing in line at the bank to cash checks & whatnot. Now I don't ever, ever go there. I used to only go there to get foreign currency or travelers checks when I traveled and now you don't have to do that either! 3 cheers for progress.

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We don't even have a physical bank as we use USAA, so I haven't been to a bank for over 10 years, and have been using web bill pay for at least 13 or 14 years? My children all have accounts and have since they were infants, we placed money that they got for their baptisms into them and then just continue to add to them at each birthday etc into them. Its as easy as clicking a button on a computer, and we get all of our statements on line. Checks just get scanned. Not hard. Lisa we recently refinanced to a 15 year mortgage and yes, they came to our house for closing, very easy.

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"freddieflounder101" wrote:

I know! I still remember standing in line at the bank to cash checks & whatnot. Now I don't ever, ever go there. I used to only go there to get foreign currency or travelers checks when I traveled and now you don't have to do that either! 3 cheers for progress.

I know the company I work for is having some financial problems so quit letting us direct deposit which is very annoying. But I am so happy that I can at least take a picture of my check and deposit it with my phone, that is the next best thing! I pay all my bills online now even if I am sending a check to my sister I do it online because why pay for a stamp?

I hardly ever even go to the ATM anymore because I just get extra cash when I am paying at Walmart or almost anywhere else.

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"GloriaInTX" wrote:

I know the company I work for is having some financial problems so quit letting us direct deposit which is very annoying. But I am so happy that I can at least take a picture of my check and deposit it with my phone, that is the next best thing! I pay all my bills online now even if I am sending a check to my sister I do it online because why pay for a stamp?

I hardly ever even go to the ATM anymore because I just get extra cash when I am paying at Walmart or almost anywhere else.

It's amazing that I can deposit checks with my phone, although my paycheck is direct deposit. I love the technology available now, stuff like this gives me the gift of TIME to do the things I want, be with my family, not have to take time off work to do things during so-called business hours, etc. I really do remember back before ATMs, even. Banking was a pain in the a**.

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"SID081108" wrote:

Oh my gosh, people on this board get worked up about the most random things.

You do indeed!

I am just really surprised that someone with a job and an address wouldn't have a bank account. Really, very surprised. I'm not telling her she's wrong, just surprised. I don't think I've ever met someone without a bank account in a first-world country before.

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"blather" wrote:

You do indeed!

I am just really surprised that someone with a job and an address wouldn't have a bank account. Really, very surprised. I'm not telling her she's wrong, just surprised. I don't think I've ever met someone without a bank account in a first-world country before.

You haven't been around poor people very much then. Why do you think that McDonald's pay people with Debit cards in the first place? There are MANY working poor who don't have bank accounts. They would rather use cash and go to these check cashing places and get their checks cashed every payday. When I was a caseworker for Food stamps it was VERY rare for any of our clients to have a bank account.

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"GloriaInTX" wrote:

You haven't been around poor people very much then.

Yes, yes I have. But thanks for the assumptions.

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My parents had NOTHING when I was born. We lived in the projects and my dad went to trade school so we could get out. Even when he got a job after school and wasn't paid much they had a bank accounts and they lived paycheck to paycheck.

The people I've met that don't have an account all were hiding something.

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Hands up if your first (or second, or third) job was flipping burgers. My hand's up. I made $3.15 an hour and that was right around the poverty line, but I still put my pathetic bi-weekly paycheque into my bank account. Same with my second job at K-mart, and same with my third job working on a deli line. I've been poor. Broke and living off soda crackers, peanut butter and KD. And, I was far from alone back then.

Cheque cashing companies make poor people poorer, IMO, and probably help perpetuate the cycle of poverty. You leave with a fist full of cash and it's a case of easy come, easy go. Easier to spend it all when it's all right there in your wallet, and you only get your money after paying a substantial fee off the top of your already meager pay.

Each state has its own laws about how wages must be paid. In Pennsylvania, the Wage, Payment and Collection law states that employers ``shall pay in cash or by bank check,'' according to material sent Tuesday from the state Department of Labor and Industry.

http://www.nbcphiladelphia.com/news/local/Woman-Sues-Over-McDonalds-Wages-Placed-on-Debit-Card-212072301.html

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I agree. I didn't flip burgers but I scooped ice cream. In a hat with a hot pink pom pom.

First paycheck, my mom drove me to the bank and walked me through opening up a checking account.

Check cashing places are skeezy to me and their fees are stupid. I stayed with that first bank until Bank of America bought it out.

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I agree. I didn't flip burgers but I scooped ice cream. In a hat with a hot pink pom pom.

First paycheck, my mom drove me to the bank and walked me through opening up a checking account.

Check cashing places are skeezy to me and their fees are stupid. I stayed with that first bank until Bank of America bought it out.

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"ClairesMommy" wrote:

Cheque cashing companies make poor people poorer, IMO, and probably help perpetuate the cycle of poverty. You leave with a fist full of cash and it's a case of easy come, easy go. Easier to spend it all when it's all right there in your wallet, and you only get your money after paying a substantial fee off the top of your already meager pay.

I agree with you I used to work as a cashier at a retail store where we cashed paychecks for a fee. So I saw the many people who had no bank accounts come through there every Friday to cash their checks. I am not saying it is a good thing, I am saying that it is not unusual as some people seem to think. Checking accounts aren't free either for people who don't have a lot of money to put in them. Most checking accounts require at least direct deposit or a minimum balance or they charge fees. Then there are also the overdraft fees if you are living paycheck to paycheck it is easy to make a mistake and then you are hit with a $35 fee if you go over. That is difficult to overcome if you don't have much money in the first place, and so some choose to just use cash instead.

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