Many large employers such as Wal-Mart, Taco Bell and McDonald's that have thousands of employees nationwide, including in Texas, now pay their employees with pay cards. In order to access their wages, employees often have to pay fees. The cards work like debit cards, but are not regulated the same way.
Credit cards and checking account fees are at least somewhat regulated by the federal government. Companies such as Citicorp and JP Morgan are only allowed to charge certain fees for certain services when it comes to credit cards and checking accounts. Pay cards are not regulated, which means that these large companies end up recouping their losses from elsewhere in sometimes exorbitant fees on pay cards. In a lot of cases, employees that are given these pay cards end up bringing in less than minimum wage once all of the fees are subtracted.
Fees are often charged for ATM withdrawals, statements and fees for not using the card often enough. Some employees have taken to withdrawing their entire check all at once in order to minimize the amount of fees he or she will have to pay when using the card. Pay cards have increased in popularity since more and more Americans don't have bank accounts anymore. The last estimate was somewhere around 24 million people.
In many states, employers risk not only government scrutiny but also lawsuits from their employees if they do not offer employees an alternative to pay cards. There are many employees in Texas that receive their wages on a pay card. An employee that was not initially offered an alternative form of payment may ask his or her employee if there is another option as is mandated by federal wage and hour laws.
Source: The Economic Times, "As pay cards replace paychecks, bank fees hurt workers," July 1, 2013