Texas Subway Employee Files Lawsuit Over Payroll Debit Cards

Austin Oil and Gas Attorney, Gregory D. Jordan

Austin Oil and Gas Attorney, Gregory D. Jordan

Austin, TX (Law Firm Newswire) August 1, 2014 — A worker at a Subway restaurant outside of Austin, Texas has filed a class action lawsuit against his employer over its practice of paying employees with prepaid Visa cards, which may be subject to fees.

Jake Branson filed the lawsuit on his own behalf and on behalf of other Subway employees after his paper checks were replaced with prepaid Visa cards. He found that using an ATM to withdraw cash from the cards could result in a $1.75 fee, that checking the balance of the card cost $1.00, and that a $0.50 fee could apply when making a store purchase.

While regulation of prepaid cards varies, experts say that in Texas, the cards can typically be issued to employees who give consent.

“Texas labor laws usually permit employers to issue prepaid cards to workers who agree to the plan,” said Gregory D. Jordan, an Austin employment attorney. “A key factor in a case like this will likely be whether the employee really had a choice.”

Branson earns $7.25 per hour working at the Subway restaurant in Leander, Texas, which is operated by Destiny Foods. He said that transaction fees cost him $7 or $8 when he first began using his prepaid card. Now Bank of America cashes out his card free of charge, which is generally required under federal law. Branson said he asked his employer to bring back paper checks and was told no.

According to experts, prepaid cards are becoming more popular for wage payment. A study by the Aite Group research firm found that 3.7 million employees were paid a total of $26.6 billion using the cards in 2011. By 2016, the firm projects that those numbers will double.

Employers can sometimes save money by using prepaid cards, foregoing the cost of printing paper checks. The institutions that issue the cards profit from transaction fees. Some employees who do not have bank accounts may prefer the prepaid cards, as they may permit them to avoid check-cashing fees. But according to Branson, he and other employees had no choice.

To learn more, visit http://www.theaustintriallawyer.com/

Law Offices of Gregory D. Jordan
5608 Parkcrest Drive, Suite 310
Austin, Texas 78731
Call: 512-419-0684

View Larger Map

  • Texas District Court approves employment lawsuit settlement that extinguishes claims under state law
    A federal court has ruled that a settlement of a collective action lawsuit filed under the Fair Labor Standards Act (FLSA) may include a release of any plaintiffs’ rights to overtime pay under state law. Wells Fargo was the defendant in five different overtime pay lawsuits filed by former mortgage consultants, loan consultants and loan […]
  • GE Oil & Gas Employee Files Lawsuit Alleging Race Discrimination
    A Harris County man has filed a lawsuit against his employer, GE Oil & Gas, claiming that he was discriminated against because of his race. Gaspar Salas filed the lawsuit in the Southern District of Texas on June 12. The lawsuit claims that Salas was hired July 11, 2011 to work as a machinist for […]
  • Robotics company sues to recover unpaid commissions
    A robotics company has filed a lawsuit in Jefferson County District Court. C&D Skilled Robotics Inc. claims that another company has failed to pay commissions it owes. C&D filed the lawsuit against TGW Systems Inc., claiming breach of contract. According to the lawsuit, the two companies entered into a contract calling for C&D to receive […]