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Mandatory Payroll Debit Cards Unlawful...At Least in Pennsylvania


Siciliano v. Albert/Carol Mueller t/a McDonalds - Superior Court of Pennsylvania


Facts:  Albert and Carol Mueller ("Muellers"), through a limited partnership, owned and operated 16 McDonalds franchises throughout Pennsylvania.  A class of current and former McDonalds' hourly employees brought suit against the Muellers and alleged violations of the Pennsylvania Wage Payment and Collection Law ("WPCL").  These employees claimed the Muellers violated the WPCL by paying employee wages from November 2010 to July 2013 by way of mandatory JP Morgan Chase payroll debit cards, instead of by cash or check.  After the class was certified, the lower court denied the Muellers' motion for summary judgment.  Included in the court's order were instructions that the decision could be immediately appealed.  The Muellers subsequently appealed to the Superior Court of Pennsylvania.

Holding:  The Superior Court began its analysis with a review of Section 260.3 of the WPCL which holds that "The wages shall be paid in lawful money of the United States or check."  In this instance, the Court held the language of the statue was clear and therefore there was no need to look beyond the plain language of the WPCL.  As a result, under the language of the statute, a debit card is not "lawful money" or a "check" as provided by the WPCL.

The Court then turned to the Muellers' argument that a debit card is the functional equivalent of lawful money or a check.  However, the Court noted that the mandatory debit cards resulted in the hourly employees incurring fees, over the counter cash withdrawal charges, and other related charges...unless the employees complied with the JP Morgan Chase requirements.  Had the debit cards been voluntary, the Court held that could be an appropriate method of wage payment.  However, the Court held that until the language of the WPCL is altered, mandatory payroll debit cards did not comply with the statute and were therefore improper.

Judgment:  The Superior Court of Pennsylvania affirmed the lower court's ruling and held that under Pennsylvania law, an employer cannot mandate that hourly wages be paid via payroll debit cards to its employees.

The Takeaway:  This was one of the more succinct opinions I have read in some time.  Since the statute was clear on its face, there was no need to look beyond the plain meaning of what the statute actually stated:  "The wages shall be paid in lawful money of the United States or check."  Interesting to note the Court differentiated between mandatory and voluntary payroll debit cards on the grounds that employees who voluntarily chose to be paid via payroll debit cards could be lawful.  However, under the language of the WPCL, as written, there simply was no argument for the Muellers to base their claim.  As always, the laws can vary by state...so double check the laws in your jurisdiction to see how mandatory payroll debit cards are handled. 

Majority Opinion Judge:  Judge Lazarus

Date:  October 21, 2016

Opinion:  hr.cch.com/eld/SicilianoMueller102116.pdf

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