Minimum wage workers forced to be paid through prepaid cards

[bUU]

The state of California pays unemployment and disability benefits with debit cards. (Apparently, so do most states?).

There are no fees for the following:

• Cash-back with purchases at grocery stores, drug stores, and U.S. post office locations.
• ATM withdrawals at domestic Bank of America ATMs (which can be found in 482 towns/cities in California, and that's only counting each ATM once, even though a city like Los Angeles has over 50 ATMs, alone)
• Two free ATM withdrawals per benefit deposit at non-Bank of America ATMs (though the other Bank may charge a transaction or service fee).
• Unlimited teller cash access at any bank or credit union that accepts Visa® cards.
• Unlimited direct deposit transfers to a checking or savings account (including non-bank of America accounts).
• Unlimited balance inquiries at ATMs and online customer service.
• Unlimited automated and live customer service inquiries.
• Free domestic card replacement.

[MonkeyMama]

IMHO, this kind of practice simply boils down to employers saving money by going to a less expensive payroll option, and employees getting stuck with the fees. And since it impacts those making less money even more, I dislike banks even more now.

Exactly.

I think this sums it up pretty well, except it is much bigger than this. The big banks make revenue sharing agreements with the states. Money is definitely being made at the little guy's expense.

[bUU]

Assuming the little guy isn't a taxpayer, that's regrettably true.

[Tonyall]

Here in Japan, wages are always paid by direct deposit, except for those occasions were they are in cash. So, if you do not have enough ambition to go open a bank account, you do not get paid. Getting paid by check or any other means is simply unheard of.

I guess that might be a problem for some people who are really down and out and do not have an address etc. However, I sure cannot understand why so many in the US who obviously are not that bad off want checks.

My last job in the US, about 10 years ago, it seemed like about half of the people, none of them down and out, were still being paid by check.

If I was making the rules, I would make it legal to withhold the wages of people like that until the opened a bank account. What a waste of time and resources.

[ShawnaC123]

If I was making the rules, I would make it legal to withhold the wages of people like that until the opened a bank account. What a waste of time and resources.

If that were to happen, a boatload of banks would start giving out high fee checking accounts for people that aren't good candidates for a regular bank account. The net result probably wouldn't be any better for those that are currently unbanked.

[Barclay]

My teen has one of these for her job this summer. She had the option of direct deposit, but only if she provided a check with routing numbers (she doesn't have any checks).

In the future, have her go to the bank and they will print her out a "check" that shows her routing and account number. My daughter ran into this and I refused to allow her to get that prepaid card. She doesn't have a use for paper checks so the bank gave her one that her new job would accept to establish her direct deposit.

[moneybags]

In the future, have her go to the bank and they will print her out a "check" that shows her routing and account number. My daughter ran into this and I refused to allow her to get that prepaid card. She doesn't have a use for paper checks so the bank gave her one that her new job would accept to establish her direct deposit.

Thanks for that info; we didn't know that was an option. Luckily this is just a summer job so we'll leave it as is.

[Gailete]

My last job in the US, about 10 years ago, it seemed like about half of the people, none of them down and out, were still being paid by check.

If I was making the rules, I would make it legal to withhold the wages of people like that until the opened a bank account. What a waste of time and resources.

That was the usual and customary way of being paid in the USA 10 years ago - by check. Those that were down and out had trouble cashing their checks since many that have had too many 'rubber' checks were no longer allowed to have a bank checking or savings account so the only way for some was to use check cashing services and pay something like $25 to cash their paycheck.

I don't understand though why these places can't do a direct deposit for those that do have accounts and leave the cards for those that don't. How is someone supposed to pay their rent with a debit card? And to have to pay fees on top of it. If I was getting paid that way, I would figure out some way to get around the fee somehow, but I think it is sad to do this to those that have the least. My last job and my disability checks are all direct deposited and I like knowing that my money is in my account and you don't have to wait for the mail.

[kv968]

In the future, have her go to the bank and they will print her out a "check" that shows her routing and account number. My daughter ran into this and I refused to allow her to get that prepaid card. She doesn't have a use for paper checks so the bank gave her one that her new job would accept to establish her direct deposit.

You can also just look up a bank's routing number online. That number may differ from state to state but isn't unique to the person.

[moneybags]

You can also just look up a bank's routing number online. That number may differ from state to state but isn't unique to the person.

We had the routing number & account number, this employer insisted on an actual check.

[disneysteve]

My teen has one of these for her job this summer. She had the option of direct deposit, but only if she provided a check with routing numbers (she doesn't have any checks).

My daughter doesn't have a checking account either - just a savings account. Fortunately, she hasn't had this issue. The one "real" job she works pays her by check. We do plan to open a checking account for her when she turns 18 in a couple of months though so it won't be an issue anymore.

[moneybags]

My daughter doesn't have a checking account either - just a savings account. Fortunately, she hasn't had this issue. The one "real" job she works pays her by check. We do plan to open a checking account for her when she turns 18 in a couple of months though so it won't be an issue anymore.

DD has a checking account, she just doesn't have any checks for it. She uses her debit card for everything.

Unless your daughter needs a checking account now, you might want to hold off until she has her college picked out. We chose DDs bank based on what ATM was available on campus. They also had a no-fee account for college students.

[disneysteve]

DD has a checking account, she just doesn't have any checks for it. She uses her debit card for everything.

Unless your daughter needs a checking account now, you might want to hold off until she has her college picked out. We chose DDs bank based on what ATM was available on campus. They also had a no-fee account for college students.

Interesting. I can't imagine having no checks. That would be a pain since there are still things that I need to pay by check. One thing that we intend to have DD start paying for when she turns 18 is her youth group activities which all get paid by check. I suppose we could just have her pay us and I'll write the checks.

Thanks for the tip about waiting until she chooses a college. That's actually what we did when I went to school. We opened my an account at the bank across the street from campus which also offered special student accounts.