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By Rhonda Smith
May 12 — The parent company of the Olive Garden restaurant chain plans June 1 to expand by 29,000 the number of automated teller machines that accept its employees' payroll cards without charging a fee, a spokesman for the Orlando, Fla.-based chain told Bloomberg BNA May 12.
Darden Restaurants Inc.'s hourly workers currently have the option of using the employer-issued prepaid debit cards at more than 50,000 ATMs nationwide at no charge, company spokesman Rich Jeffers said. “We're increasing that number to 79,000 on June 1,” he said.
Also effective June 1, Darden workers who use payroll cards will no longer be charged a 50-cent fee when a card is rejected at the point of sale because it contains insufficient funds to cover a purchase, Jeffers said.
Darden, which operates more than 1,500 restaurants and other companies, such as McDonald's, Home Depot and Wal-Mart Stores Inc., has been criticized for offering their low-wage hourly workers payroll cards because of myriad fees tied to the use of the cards, according to a report the Restaurant Opportunities Centers United released May 12. Its title: “The High Cost of Getting Paid: How Payroll Cards Cost Darden Employees.”
“Payroll companies realize huge profits from fees, and employers can save millions by switching to a paperless payment system,” the report stated, “but for low-wage workers payroll cards can pose a significant barrier to accessing their wages.”
ROC United said in the report that barriers posed by Darden's use of payroll cards include lack of instruction for workers on how to use them and fees employees face to access their wages at out-of-network ATMs.
From December 2014 to July 2015, ROC United surveyed 200 Darden employees, primarily online, about their experiences with payroll cards.
Jeffers said that because the survey was conducted with only 200 of Darden's 150,000 employees, the results are questionable.
More than three-quarters (76 percent) of the survey respondents said they must pay fees to access their wages at ATMs. “Workers can incur fees of $1.75 or more for withdrawals from an ATM and $10 for a replacement card,” the report stated.
“When withdrawing from an out of network ATM, workers encounter fees from both Darden's payroll card and the ATM provider,” it said.
Jeffers said Darden employees don't pay a fee to replace their payroll cards.
Nearly two-thirds (63 percent) of respondents said they weren't told about all of the fees associated with payroll cards before they got them, according to the report. In addition, 54 percent who used a payroll card to buy gas said they had experienced large authorization holds on their card as a result.
“Payroll cards should be offered as one of several free and safe ways for workers to receive their wages, rather than be used as a vehicle for steering employees towards costly and unwieldy accounts,” the report said.
Among ROC United's 15 policy recommendations outlined in the report were:
Darden, which pays its employees weekly, isn't “hearing these concerns” about the payroll cards from its employees, Jeffers said.
Among the company's hourly employees, 50 percent voluntarily use payroll cards, 48 percent elect to get paid through direct deposit and the remainder choose paper checks, he said.
“They can use the pay card at any bank that displays the Visa logo, whether they have an account or not, to withdraw funds,” Jeffers said.
There is no fee if employees use the payroll card to pay a bill, he said.
Employees can access their payroll card account online, by using their mobile phone or by contacting the payroll card provider's call center, he said.
The cards primarily are used as a “convenience factor” for the company's employees who choose to use them, he said. “It's their choice,” Jeffers said. “We don't tell them they have to use a pay card.”
The ROC United report was released in conjunction with protests that advocates for a coalition of environmental, social justice and animal-welfare groups held May 12 at Olive Garden restaurants in Boston, Chicago, Los Angeles, New York City, San Francisco and Washington, D.C. The protests are part of an ongoing “Good Food Now!” campaign (see related story).
To remain competitive, Olive Garden and Darden must improve their food-sourcing and labor practices, protest organizers said.
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Text of the report is available at http://src.bna.com/eWI.
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