Can my employer pay me using a pre-paid ATM card?

Maybe not.  Often, the banks that issue these cards charge fees to withdraw money or use them to pay for items.  This results in you being paid less money for your work.  An employee in California who was paid her final wages on one of these cards filed a lawsuit, which was recently settled. Read more here. There are often financial incentives for employers to use this system over checks or direct deposit.

The New York Attorney General’s office has issued a report regarding this practice.  There are many issues addressed in this report, such as the lack of choice employees often have with regard to whether they are paid by card.  Further, many programs are difficult to understand and employees could end up being surprised by fees.

 

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