By Karen Freifeld
New York, July 3 New York is investigating some
of the country's largest companies over their use of cards to
pay hourly employees, a person familiar with the matter said on
New York Attorney General Eric Schneiderman sent letters on
Tuesday to more than 20 companies asking for information on
their use of the payroll cards, the person said.
The companies include Walgreen Co., Home Depot Inc.
, Wal-Mart Stores Inc. and Darden Restaurants Inc.
, which owns Red Lobster and Olive Garden, according to
copies of the letters obtained by Reuters.
The probe by Schneiderman comes after complaints from
workers and advocacy groups about fees associated with the
cards, said the source, who was not authorized to speak publicly
about the matter. It was first reported by the New York Times.
The cards, which have grown in popularity in lieu of paper
paychecks and direct deposit, can carry a host of fees, such as
50 cents or $1 for a balance inquiry and $1.50 for an ATM
They may appeal to low-wage workers who do not have bank
In the letters, the New York attorney general's office asks
for documents and communications regarding each company's use of
payroll cards over the past year, the number of employees in New
York who use them and fees paid as a result of the cards.
Terri Gerstein, chief of the attorney general's labor
bureau, who wrote the letters, requested the information by July
Wal-Mart, the world's largest retailer and the largest
private employer in the United States, said it would respond to
the attorney general's office.
Wal-Mart employees choose whether they want their wages on
the card, said Wal-Mart spokesman Randy Hargrove. The majority
of employees pick direct deposit, he said.
Wal-Mart has offered the card since 2009, Hargrove said.
Employees have free, unlimited withdrawals at Wal-Mart stores
and Sam's Club warehouses and can also get one free ATM
withdrawal per pay period, he said.
Home Depot said it does not offer pay cards to its employees
in New York.
A Darden spokesman said each employee is set up with access
to a pay card, but can receive their pay by check or direct
deposit instead. The spokesman said the card is a way for
employees to gain access to pay without incurring check-cashing
fees and carries no fees of its own at certain outlets.
Walgreen did not immediately return a call for comment.
Payroll card issues came into the public eye last month
after a Pennsylvania woman sued a McDonald's franchisee over its
use of them.
Natalie Gunshannon said she was required to get her wages
through a JP Morgan Chase Payroll card that carried fees,
including $1.50 for each ATM withdrawal and $1.00 for each
balance inquiry, according to the lawsuit.
The McDonald's franchisee could not immediately be reached
for comment. McDonald's Corp., the parent company, said
in a statement that it offers electronic payment options in the
form of pay cards or direct deposit to its employees.
McDonald's franchisees determine how they pay their own
employees, the world's biggest fast-food chain said.
The lawsuit, which seeks class action status, is Natalie
Gunshannon v. Albert and Carol Mueller T-A McDonalds, 7010 of
2013, Court of Common Pleas, Luzerne County, Pennsylvania.