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LawGirl
LawGirl, Lawyer
Category: Employment Law
Satisfied Customers: 4606
Experience:  I have practiced employment law.
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I have direct deposit with my employer. I turned in my paper

Resolved Question:

I have direct deposit with my employer. I turned in my paper work to change my direct deposit account to chase from bank of america two weeks ago. My employer informed me yesterday that she forgot to submit the paper works. The money had already gone in to the old account. I have not used my old account for months. I even cut up the debit card. When i looked into the account, there were charges that I did not know was going through and have not authorized, and it made my account negative in a significant amount. Will my employer be able to reverse the direct deposit?
Submitted: 6 years ago.
Category: Employment Law
Expert:  LawGirl replied 6 years ago.

LawGirl :

Thank you for your question. Although I am an attorney, I cannot represent you. However, I will give you the most thorough information. Unfortunately, reversing a direct deposit is very difficult for an employer. When an employer reverses a direct deposit this requires the employer to make a withdrawal from your account. As many times an employer would not have authorization to make this withdrawal, many employers are not set up to handle reversals. Have you asked your employer whether they are set up to reverse direct deposits?

Customer:

yes, they state they are able to give me a live check today. and they will call the bank and if the account is in good standings, they will get the money bank.

Customer:

i'm concerned that if I take the live check today, will they get the money back

Customer:

if the bank does not give them the money back, then I will owe my employer money

LawGirl :

This is great news. For your own protection, you may also want to contact your bank and ensure that your employer will be able to get the money back before you cash the new check today.

Customer:

i spoke to my bank yesterday. and they state they can't reverse the process for me, but to talk to my employer

LawGirl :

Did they mention why they could not reverse the process? Did they state that your employer can reverse the process? Or, can the process not be reversed at all?

Customer:

when I spoke to them, they stated that they cannot reverse the process because my account was in negative balance before the payroll went in. They state I need to contact my employer; however, they did not state whether or not they are able to reverse the process with them

Customer:

negative balance because of unauthorized charges

Customer:

i have not used this old bank account for months. I had no notifications that charges were going through and overdrafting this account

Customer:

and I do not have history with this old bank of having negative balance

LawGirl :

Ok, if there is a negative balance then it is unlikely your employer will be able to reverse the deposit because a negative balance means that the bank no long has funds in your account from which to refund your employer.

Customer:

I'm guessing the best way is to contact my old bank and dispute the charges

Customer:

where do i go from here?

LawGirl :

If you can dispute the charges that is a good way to go, it may bring your balance back to better standing to allow your employer to move forward. You may also want to let your employer know not to reverse the the direct deposit just yet. They may incur a fee for trying and/or face frustration in the process with the status of your account. You may consider letting them know that something is not right with your account right now and that you have to get it squared away before the reversal can occur.

Customer:

okay. thank you very much for your time and help

LawGirl :

Best of luck to you!

LawGirl and 3 other Employment Law Specialists are ready to help you

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