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Forgotten Payroll Deposit

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jdpx4

Junior Member
What is the name of your state? INDIANA

We are paid every 2 weeks - everyone is on direct deposit. This past Friday, our controller "forgot" to make the payroll deposit until after 2pm, which meant the deposits didn't get posted until the next business day (Monday) except for the bank where the employer has this account.

For instance, our son has a checking account at this bank and his deposit showed up late Friday.

My husband and I, like many other employees, bank elsewhere. To date, the deposit has not shown up in our account. Several employees have automatic deductions taken from their checking accounts (us included) for such things as car or mortgage payments, etc., and many of these employees received overdraft charges resulting from this situation.

In particular, I took our daughter to the dentist on Thursday afternoon, counting on the direct deposit to be in the bank Friday morning as it always is. So far, that check has not been deposited that I can tell, but if it comes in before the bank credits us for the direct deposit, we're in big trouble.

The controller has spoken to some employees who became concerned over possible overdraft charges, and said the employer would more than likely pay whatever charges might be incurred due to her mistake. Being paid every two weeks cuts things close for most people there - us included - as we tend to pay down most of our bills with the first check of the month and usually don't leave much to cushion us.

This has never happened before. My question is this - is the employer bound to pay the overdraft fees, etc. should they start coming in? I know of thirteen employees who say they were not able to buy groceries, gas and other necessities because they did not receive a payroll deposit in time for it to post to their checking account, thus making their account balance either be negative or not have enough to live on this weekend.

Speaking honestly, we only have $25 in our checking with a $1400 deposit floating around somewhere. We surely could have used that to buy groceries this weekend ourselves, instead we had to buy whatever we could with that $25 and know in the back of our minds, there was a $99 check to the dentist waiting to come through on top of that.

It is maddening to think someone could "forget" to make a payroll deposit. This employer has bounced petty cash checks in the past, one employee tried to cash a $64 check once and was told there was not enough funds to cover it and to speak to the employer. She did so, and was told to wait until the next afternoon and try again!

Over 100 employees work here, and it is a private club business.

Several employees have started a petition to stop the direct deposits, stating they could count on receiving a check before and at least they would have the option of cashing that on Friday instead of waiting until who knows when to have access to their earnings!

Please advise.

Thanks
 


pattytx

Senior Member
The employer is not legally obligated to reimburse employees for any overdraft fees; the employees should have confirmed that the deposit had, in fact, been posted before writing checks. Having said that, however, it would be nice if they would do so. They also could have offered small short-term loans/advances to tie the employees over the weekend. I actually do know what it's like to live from paycheck to paycheck; I'm on unemployment right now! :o

"Forgetting" to transmit the direct deposit file is a big mistake. However, employers don't have to cash checks for employees, so I wouldn't use that as one of your criteria. If there have been problems with this before, or you think the company is in financial trouble, you may want to consider whether you want to continue working there.

According to my sources, in Indiana, three criteria exist for direct deposit:
1. The employee must authorize the direct deposit
2. The employee must be able to choose the financial institution
3. The employee must not incur additional fees (such as with the paycard program; this excludes overdraft fees due to the failure of the employer to meet the banking deadline and the failure of the employee to make sure the funds are available before writing checks against the account)

Based on this, it seems obvious that the employer cannot mandate employees to elect direct deposit. I did find, however, that if an employee is fired for refusing or revoking his authorization for direct deposit, the Indiana Dept. of Labor will not go to bat for you; you would have to bring a civil suit for damages and see what happens.

I would first ask the payroll dept. about revoking your direct deposit authorization and see what they say. I'm sorry you're going through this; it stinks! :mad:
 

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