Hidden fees raise concerns for payroll cards

A new state law allows employers to pay workers by depositing money into debit accounts, but critics worry about hidden fees. Payroll cards function like regular debit cards and can be used for purchases

News 12 Staff

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Oct 11, 2016, 4:11 AM

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Updated 2,937 days ago

A new state law allows employers to pay workers by depositing money into debit accounts, but critics worry about hidden fees.

Payroll cards function like regular debit cards and can be used for purchases or at ATMs like other Visa or MasterCard cards.

"I think this is the wave of the future," says employment attorney Marc Zaken of the optional program.

The new law requires recipients get at least three withdrawals without incurring any fees, but after that, some labor groups are worried about costs.

Zaken says other states with similar programs have seen problems with the hidden fees associated with withdrawals, replacing lost cards or having the cards physically stolen and used without authorization.

And some workers say they'd rather see physical copies of their checks and pay stubs.

Proponents say the cards are beneficial to low-wage employees who don't already have checking accounts. Many of those workers go to expensive check-cashing stores to get their money.