How A Giant Restaurant Conglomerate Teamed Up With Banks To Stiff Its Workers

[Snarkoleptic]

Last edited Sat May 14, 2016, 01:42 PM - Edit history (1)

http://thinkprogress.org/economy/2016/05/12/3777607/darden-restaurants-payroll-cards/

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

And from the linked article-
http://rocunited.org/

KEY FINDINGS
Problems with Darden’s use of payroll cards include:
• 23% OF EMPLOYEES reported not being given instructions on how to use the Darden Card.
• 76% OF EMPLOYEES reported having to pay fees to access their wages at the ATM.
• 24% OF EMPLOYEES reported fees at point-of-purchase.
• 63% REPORTED that they were not told about all of the fees associated with the card before it was issued to them.
• 42% REPORTED experiencing problems accessing their wages through the payroll card.
• 49% REPORTED that they do not have access to ATMs that do not charge them a fee to access their wages.
• 54% OF EMPLOYEES who used the card to fill up their gas tanks have experienced large authorization holds on their card as a result.
• 26% REPORTED not being allowed to choose an alternative method of payment to the Darden payroll card.
Workers across Darden’s restaurant concepts reported paying fees of $1.75 to
withdraw wages from an ATM; $10 for a replacement card; and a $5 monthly
maintenance fee after 6 months of inactivity.

[Snarkoleptic]

1. On a personal note, I received a "Safety Award" at work.

It was paid on such a debit card and was a huge pain in the ass to use, not to mention the fees. It didn't have my name on it and every time I tried to use it, (typically at the grocery store) it required a store associate to intervene so the transaction could go through, which was about a 50/50 likelihood.
I was only able to extract 84% of the value of the card and it has since expired, making me wonder who gets funds left over from such programs.

[jtuck004]

13. The bank that issue it. It stays in a fund and they keep getting interest from it. And when it

expires, the money is lost to them.

That's why they sell them, push them so hard. Kinda like bank$ter heroin.

[MH1]

2. Holy crap, I didn't know about this gambit. Thanks for posting.

I got a junk email at work trying to give me info about this ("how much your company can save by using pay cards instead of checks" kind of crap, I have held myriad positions so I get junk email on absolutely every imaginable business topic). I delete that nonsense as a matter of course (sometimes marking it as spam first) but that had been the first I'd heard of this new payment technique so I remembered it. I'll be on the lookout if it seems my company might implement this crap.

[zentrum]

3. Neoliberal economics.

[Agnosticsherbet]

4. Steve, you are incredible.

Thanks for bringing this to my attention.

[lark]

5. Heinous assholes

Darden and the bank. Will boycott their restaurants going forward.

[Enthusiast]

28. Perfect description. nt

[My Good Babushka]

6. Anytime workers get help

with subsidies there are banks and corporations dipping their fat beaks into it, and now workers can't even get their own earned wages without some middleman skimming off of it! This is grotesque.

[bulloney]

7. Darden restaurants include Olive Garden, Red Lobster, Longhorn Steakhouse, Yard House, Bahama Breeze

[itsrobert]

14. Darden sold Red Lobster

They are no longer owned by them. New owner is Golden Gate Capital.

[bulloney]

29. Must have been recent. I received a Darden gift card and Red Lobster is listed.

[nvme]

23. one slight correction

Darden Spun off Red Lobster

[nvme]

24. Capital Grille is part of their portfolio too

Jus sayin

[rladdi]

25. America boycott this chain of restaurants. They don't deserve to be in business.

Making a profits on the wages of the employees as well as the profits the restaurant makes. Boycott them.

[AzDar]

35. ^ This.

[basselope]

38. Also Season's 52 (which was one of my favorites, but now I can't go to anymore)

[Amimnoch]

42. Noooooooooooooo!

Granted, I can only afford that place about once a year, but it's our anniversary place.

No more Olive garden endless soup and Salad..
No more longhord outlaw ribeye...
No more crispy duck wings and Shiitaki garlic noodles at Yard house...

This is a boycott that's gonna hurt.

At least this is one I may be able to have a little voice in.. Pull up my credit card statements from the last year, and give them a hint of the business they're losing.

[Angry Dragon]

8. Throw the bastards in prison

[lonestarnot]

9. Can't eat at a place that fucks its workers. I'd choke.

[spartan61]

10. Darden is always trying to stiff someone.

A few years ago my daughter, who lives in Texas, was hungry for lobster. She grew up in Maine and worked in a lobster restaurant during high school and college, so she knows lobsters. She and her husband went to Red Lobster, where she ordered a lobster dish that contained "lobster" and shrimp. As she went digging with her fork to find the lobster, she noticed that there wasn't any lobster and called over the waitress to ask about it and then the manager. The manager exclaimed. "You caught us!" The "lobster" was really crawfish! My daughter was so furious that she wrote letters to Darden Restaurants with the threat that she was going to take this bait and switch to BBB and Texas Attorney General. She received a phone call from a mucky muck from Darden who offered her a lobster dinner and a gift certificate as compensation. When she went to another Red Lobster in the area to collect her real lobster dinner, she noticed that the original lobster and shrimp dinner was no longer on the menu. You can't fool a Mainer when it comes to lobster!

[braddy]

18. I grew up in Texas and knew shrimp and crabs, to this day I have never been able to figure out what

Red Lobster is about, I have never seen anything there that I recognized as real.

[Thespian2]

11. K & R

Thanks for exposing this new heinous method of ripping off workers...

On Prince Edward Island, Canada, a fish processing plant, owned by Americans, brings in quest workers from China and Mexico...they are given bank debit cards...they are paid by having money added to their card...I am not aware of all the problems with this method of payment...their cards come from the local branch of CIBC, so they probably can assess their money without too much trouble...

[azurnoir]

12. Doesn't McDonald's do something similar ? Not surprising that yet another another restaurant

is doing it too

[Sophiegirl]

15. This is one of many reasons...

...I tip with cash.

[mrsadm]

16. This has been going on for some time ...

I have heard of this a few years ago, but recall that it was connected to several restaurant chains.

How admirable a business accomplishment this is, ripping off low paid workers.

[Bread and Circus]

17. I am sure President Clinton will "look into it"

[benld74]

19. THese so called businesses today,,

They are forever thinking about their bottom line, how to improve, how to cut corners.

When ALL they really need to do it provide decent working conditions, decent wages, etc.

Workers will WANT to work there. Be happy working there.


TOdays businesses cannot see past their self imposed blinders

[maindawg]

20. It's evil

It's like the company store. This is illegal I am sure. These people should get organized and demand paychecks. Another evil Corporation running roughshod over good American workers.

[Mopar151]

27. Did'nt Wall -E -World already try paying in "scrip"?

Or next to it.......

[SheilaT]

21. Several years ago I had a part time job

at a Zales jewelry store, and my first paycheck, maybe the first two were in the form of a card. It was less then convenient, because I couldn't use the money on it to pay bills. Plus, of course, there were the fees.

I think after that I get physical paychecks, but I no longer recall.

I like it best when I work for a company that does direct payroll deposit.

[MrMickeysMom]

22. Every time you hear about how much job growth reported by percentages quarterly...

... Remember who these folks are and how they and, thus WE are screwed!

I won't go to a Darden establishment for this, and for how unhealthy most of the menus are.

[Snarkoleptic]

26. These fine folks also fought against healthcare and paid sick days for employees.

You know, because nothing spells freedom like a sick person forced to work in foodservice.


http://www.sourcewatch.org/index.php/Darden_Restaurants
At this link, you'll also read about their other shabby behavior, including ALEC membership.

Darden has fought hard against new laws and regulations on paid sick days policies, which would allow workers to stay at home when sick without risking their paycheck or their job. In Florida, Darden helped write and pass a bill that would ban local governments from requiring paid sick days for workers. [23] [24] Forty percent of all workers do not have paid sick days; existing federal law covers only employees working 25 hours or more at businesses with at least 50 workers, applies only to serious and not routine illnesses, and is unpaid.[25]

http://www.huffingtonpost.com/2013/06/19/darden-medicaid-california_n_3466638.html

Darden Restaurants has run into an obstacle in its battle against Obamacare: the state of California.

On Tuesday, the Orlando Sentinel first reported that Clarence Otis, the CEO of the fast-casual chain that owns Red Lobster and Olive Garden, is fighting a bill that intends to prevent companies from cutting workers’ hours to avoid paying for insurance under the Affordable Care Act.

If the legislation is enacted, large employers will be forced to pay an average additional penalty of roughly $5,500 to the state for any employee who works full time and chooses Medicaid coverage, Jimmy Gomez (D), the bill’s sponsor and a California State Assembly member, told The Huffington Post. The penalty will be prorated depending on the average number of hours employees work during the year, he added.

[blackspade]

30. That's some shady shit, there.

[Duckfan]

31. Someone should contact Senator Warren on this.

I have no doubt she would want to fix this scam.

[Ilsa]

32. On the back end, we need to authorize our post offices to

provide banking services. Let people cash in these cards at one place, have bank accounts, etc.

And yes, people need to have the option of getting a paycheck. How are employees suppose to save money with debit cards? They lose value over time.

[Snarkoleptic]

34. Yep, I can't imagine you can easily use these cards to pay utility bills, school books/registration

and myriad other necessary expenses. Attempts to convert them to cash can cost an out-of-network ATM fee and then another fee to purchase a money order to pay a bill.

[TexasMommaWithAHat]

33. Couldn't they withdraw the whole amount

and put it into a checking account?

This is outrageous!

[Snarkoleptic]

36. It seems that there are barriers to easy/no-fee access to the fruit of their labor.

Among the relevante bullet points in the OP are-
76% OF EMPLOYEES reported having to pay fees to access their wages at the ATM.
24% OF EMPLOYEES reported fees at point-of-purchase.
42% REPORTED experiencing problems accessing their wages through the payroll card.
49% REPORTED that they do not have access to ATMs that do not charge them a fee to access their wages. (an apparent subset of the 76% above)

Also, as related in my comment #1 above, I only managed to pull out 84% of the value on a card I received as a spiff from my employer.

In sum, these money access schemes only appear to be inflicted upon those in lower and middle income levels.
Yet another example of how we're prey for the corporatocracy to feed upon.

[sweetloukillbot]

46. Usually you can withdraw the amount somewhere, but there are usually fees.

When I worked for Dominos, they paid either direct deposit or ATM card. Everyone in my store got a bank account pretty quick.

[TexasMommaWithAHat]

47. Well, I think it's horrible what these companies are doing

but I think it would be better to pay a one time fee to put your hard-earned money where you want it - a checking account, cash, or whatever.

[sweetloukillbot]

48. Agreed

The thing is that ATMs don't always take the cards and they limit the withdrawal amount as well. So you get hit with a few bucks in fees from the card, from the ATM and for each time you have to withdraw to drain the card. I suspect that Darden offers direct deposit, but there are people who don't have checking accounts, or can't get checking accounts. They're the ones who get screwed.

[Flatpicker]

37. If you boycott a corp like this

Aren't you doing more harm to the 148,000 employees than you are to the shareholders?

Just thinking that there has to be a better way.
Actually, was thinking that this is very close to the company store practices that were phased out in the early 1900's.

So I guess my question is, is something like this legal, and if it is, should it be?
Maybe we should go to our senators and see if this can be reviewed, or at the very least reviewed by a labor lawyer and perhaps challenged in court?

Can't say that it'll do much, but I did send this link from TP to Senator Warren with the subject line, "Can you Help with this Banking/Employer issue?"

[Snarkoleptic]

39. They won't listen until forced to do so.

The only language they understand is revenue/profit, so they must hear the message loud and clear.
In addition to being ALEC members, Darden has also fought again paid sick time (for people handling YOUR food) as well as healthcare for their employees.
--see my posts above on this--

Now they are colluding with banksters to further exploit their employees? This cannot stand...oh, hello no!
As for seeking a legislative remedy, we live in a corporatocracy where regulatory bodies have been infiltrated and 'captured', so the voice of the citizen is almost non-existant.
So no, it's not time to approach the master and ask for a bowl of watered-down porridge.

[Flatpicker]

40. That's fine

Unless you are one of the 148k employees.

I wonder if your local Darden restaurant staff would applaud your efforts if the end result was their place of employment being shut down due to reduced business. Are you really fighting for the employees at that point, or is it just a "stick it to the corporation" maneuver?

Ideals are terrific, if you can afford to have them. Watered down porridge beats starvation esp if you have kids who have to eat too.

Not trying to be argumentative, but that's a lot of people who depend on the income. If they walked en masse, I think it would be the better option than having the public making the situation worse by directly affecting their incomes. At least they would make the choice.

Remember that Market Basket employees made a difference because they walked.

[BlancheSplanchnik]

45. Organizing a walk would also get media attention

Which would do far more to encourage boycotts and action, based on the sheer repulsiveness of this scheme.

[OwlinAZ]

44. Darden has been pulling this kind of swill for years.

Why has anyone been giving them business?
Why not use small, independently owned restaurants?

[w0nderer]

41. i xposted to poverty and working poor groups for more visibility. K/R

http://www.democraticunderground.com/11179169 Economy & Education » Omaha Steve's Labor Group (Group) (original post)
http://www.democraticunderground.com/12841046 working poor group (xpost)
http://www.democraticunderground.com/11181062 poverty group (xpost)

[lexington filly]

43. This is the equivalent of further taxation on already taxed wages.