The Company Store Is Now The Company Bank

One of the reasons why barely-paid restaurant workers continue to get screwed by giant chains in the name of profits is because these restaurant chains have enough leverage to force their workers (some undocumented) to remain poor, and Wall Street banks are more than happy to sell the rope to hang these workers with.

Workers at Darden Restaurants chains are routinely told they must accept prepaid debit cards instead of paychecks, according to a new report from the worker organization Restaurant Opportunities Center (ROC) United. A quarter of workers surveyed said they asked to be paid some other way and were told the cards are their only option. 

The practice helps the company, which came under intense pressure to cut costs from dissatisfied investors a couple years back. But it puts an expensive barrier between workers and their money. 

The restaurant conglomerate has roughly 148,000 employees in the U.S. Half of those workers get payroll cards in lieu of standard paper checks. Each card shaves about $2.75 per pay period off of the company’s overhead, saving Darden as much as $5 million per year. 

Darden’s bottom-line bliss means pain and chaos for those 70,000-plus workers. The cards come with a litany of fees: 99 cents for using it to pay utility bills, 50 cents if the card is declined at a cash register, $1.75 to withdraw money from an out-of-network ATM and 75 cents just to check the card’s balance. If a worker loses her card, she’ll pay $10 to have it replaced. 

As Darden cuts its administrative costs, the banks that provide the cards rack up significant income on the back end. Federal Reserve Bank of Philadelphia researchers put median bank earnings at $1.75 per card per month back in 2012. That suggests Darden’s financial partners are pulling down about $1.5 million a year.

So yes, remember the next time you're at Olive Garden, Longhorn Steakhouse or the Capital Grille that half the employees there are forced to used high-fee "payroll cards" rather than direct deposit, so they can nickel and dime their employees to death, and a great many of these low-paid employees are women.

And eventually, these low-paid full-time employees end up on some sort of government assistance while working 40 hours a week or more, because their employers refuse to pay them a living wage.

I know, I've had employers in the past that tried to user these payroll cards to pay me, saying they were a "great deal" for workers and saved hassle and were very convenient right up until you read the fine print and realize that it would cost you hundreds of dollars in fees a year to use the card.

But that's how we now treat workers in America.