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Allen M., Esq.
Allen M., Esq., Employment Lawyer
Category: Employment Law
Satisfied Customers: 19179
Experience:  Employment/Labor Law Litigation
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An employer that terminated me without cause agreed to pay

Customer Question

An employer that terminated me without cause agreed to pay me after letting me go, unless I said anything to ruin their name, for a period of several months. Yes, there were issues that could have had negative impact on them. I refused to participate in fraudulent activities. I received a call today announcing they forgot to stop paying me and want to reverse the direct deposits they claim were made in error. I am wondering if they can reverse payments that were direct deposited?
Submitted: 2 years ago.
Category: Employment Law
Expert:  Allen M., Esq. replied 2 years ago.

If you were paid while you were not employed, then legally yes they can reverse payments that were direct deposited,. Even if they can't, you legally have to return the money or a court will force you to and will require you to pay interest from the date that they made the request for you to return the funds.

Customer: replied 2 years ago.
Can the reverse the deposit without permission? Is there any responsibility on their part to recognize the error in a certain time frame?
Expert:  Allen M., Esq. replied 2 years ago.

They can attempt to reverse the deposit, but the bank may resist that. Then they'd have to sue you.

The only time frame they have to worry about, in terms of responsibility, is the statute of limitations for suing for unjust enrichment, which is two years. Legally, you could argue waiver if you told them they were still paying you and they didn't take any steps to correct it for months and months.

Even then, courts have long held that you cannot keep money paid to you in error.