We have been updating you on a class action lawsuit pending in the Luzerne County Court of Common Pleas challenging a Pennsylvania employer’s use of payroll debit cards to pay wages to its employees. May was a busy month for that case, with troubling implications for Pennsylvania employers who utilize this wage payment option.
First, as we previously noted, Judge Thomas F. Burke, Jr. certified a class of 2,380 former or current employees of a McDonald’s franchisee as plaintiffs in that case, captioned as Siciliano et al. v. Albert/Carol Mueller T-A McDonalds et al.
Next, on May 29, Judge Burke issued an opinion and order holding that the defendant employer violated the Pennsylvania Wage Payment and Collection Law (WPCL) when it paid the plaintiff class members with payroll debit cards. Judge Burke held that the “plain language of the WPCL” provides that employees must be paid “in lawful money of the United States or check.” Judge Burke concluded that payroll debit cards are neither “lawful money” or “check” and, therefore, violated this provision of the WPCL.
In his opinion, Judge Burke referenced the fact that this provision of the WPCL was drafted in 1961, long before the advent of payroll debit cards. He also noted that this case presented an issue of first impression for the Pennsylvania courts and issued an order allowing the defendants to file an immediate interlocutory appeal with the Pennsylvania Superior Court to seek review of this issue. Judge Burke also invited the Pennsylvania Department of Labor and Industry to issue a formal opinion on the issue and mentioned pending proposed legislation in the Pennsylvania General Assembly that would expressly authorize use of payroll debit cards by employers. It appears that Judge Burke issued his decision somewhat reluctantly, as he seemingly felt confined by what he believes is the plain language of a statute enacted more than 50 years ago.
The defendants in Siciliano required that their employees be paid exclusively by payroll debit cards, and Judge Burke’s Opinion did not indicate whether the voluntary and optional use of payroll debit cards by employees would also violate the WPCL. However, the reasoning in Judge Burke’s decision seemingly would support the notion that any use of payroll debit cards by employers in Pennsylvania could violate the WPCL, as such use would constitute the payment of wages by means other than “lawful money of the United States or check.”
We expect more definitive guidance on this issue in the future, either in the form of an appellate decision by the Pennsylvania Superior Court, a formal opinion issued by the Department of Labor and Industry, or legislative action expressly authorizing the use of payroll debit cards and establishing the conditions for their use in Pennsylvania. Until such guidance comes, the Siciliano decision confirms that the use of payroll debit cards is risky in Pennsylvania, especially if the employer does not provide other wage payment options for its employees.
Stay tuned . . .