A class action lawsuit was recently filed against U.S. Bank of California for charging employees of business payroll accountholders a $10 fee to cash their paychecks. Many of these employees are lower-paid workers who do not hold personal checking accounts and rely on their employers' banks to cash their checks.

"We are seeking an injunction to stop the bank from charging $10 per paycheck cashing fees without notifying its accountholders of potential adverse legal consequences, or at the very least, to require U.S. Bank to disclose these practices to current and future business customers," says the lawyer that filed the lawsuit.

The plaintiff in the suit against U.S. Bank of California is Leae Asset Management, a granite, marble and recycling business that believes the bank's fees have placed the company in violation of Section 212 of the California Labor Code, which requires that paychecks `be negotiable and payable in cash, on demand, without discount.' The plaintiff is acting on behalf of other California employers in the state, many who have lower-paid workers living paycheck to paycheck.

"Our suit against U.S. Bank of California doesn't focus on whether or not a bank has the right to charge a check cashing fee, but it does strongly contend that a bank cannot do so without advising its clients of the legal consequences, and more specifically, that this practice may subject employers to liability of certain provisions of the Labor Code," explains the attorney that coordinated the lawsuit.

The Department of Industrial Relations, which is responsible for enforcing the Labor Code, has already concurred that this type of bank fee violates the California Labor Code, stating that it subjects employers to criminal prosecution and substantial penalties under Labor Code 215 and 225.

The lawsuit seeks to represent any employee in the State of California who was charged a paycheck cashing fee.