Reversing Direct Deposit!!!!

[Shavawn]

What is the name of your state? New Mexico
My husband was terminated 2 weeks ago from his job working for a well known chip company. He was paid weekly, and received his next to the last check last week for 250.57 which was missing 400.00 from it. When he was hired he was told he would get 10% commission and 75.00 base pay weekly. When we got the direct deposit for 250.57 instead of 650.57 we called and asked what happened to the 400. she said that he was paid a 400. weekly guarantee pay. Since he did not work that week, all he would recieve was the difference in the commission. So, he got 250. instead of the 10% of 6000. that he sold. OK so then she said he would be getting his final check with all holiday pay this last friday. I checked our bank account first thing in the morning to see how much his check was when I discovered that my account was EMPTY!! I quickly got online to see what happened, only to find they reversed his check from the week before!! They claim he took 4 days of vacation too many and that he owed them money. Now, the vacation money is another issue ( he did earn it by the way). But either way, is it legal for them to take back his pay from a week earlier? Especially without warning us, notifying us, or asking us? We only authorized DIRECT DEPOSIT, not Withdrawls.. We have young children, and now we have NOTHING to survive on. They over drew our account when they took the money back, and I have bills that are automatically coming out of my account this week. CAN they get away with this? I am already disputing the wage issue with the DOL going after them, but I'm outraged that I was ripped off with the bank not doing anything to stop them.

Thanks,
Shavawn

 

[cbg]

Within a certain time frame (and I do not know what it is; I only know what it is in my state) an employer is entitled to reverse a direct deposit if it was verifiably for the wrong amount. I cannot tell from what you've said whether in this specific case it was justifiable or not. I can tell you that in New Mexico there is no statute requiring that vacation be paid out at termination. It IS legal for the company to say that if you haven't taken all your vacation time at termination, you lose it.

 

[Shavawn]

He already took this..

This vacation pay was for the vacation he took back in April. They say he didn't earn all of it.

 

[cbg]

That is entirely possible. Many, many, MANY companies allow an employee to take vacation time they have not actually earned if they request a vacation in the early part of the year. For example, (this is only an example; I have no idea if his company handles things this way or not) say you get 10 days vacation a year and it accrues on a monthly basis. That means that every month, you accrue .83 days of vacation. By April (INCLUDING the time accrued in April) you have only accrued 3.32 days of vacation. However,the company allows you to "borrow" 1.68 days of vacation that you have not actually earned so that you can take the vacation you've requested during the month of April. If at the end of the vacation you quit, you've taken vacation time that you have not actually earned, and in my state, at least (I don't know about yours) it is legal to deduct that time from a final paycheck, with or without your agreement or permission. That would (again in my state; yours may be different) be a LEGAL reason to reverse the direct deposit (as long as it was done within the time frame the law permits) and as long as a new check is deposited for any monies still due. For example, if the check was for $600 and that was $300 too much, they can reverse the $600 check as long as they then redeposit a new one for the $300 still due.

I honestly can't say whether what the employer did was legal or not in your state and under your specific circumstances. All I can tell you is that under the law in my state, nothing you describe is CLEARLY a violation of the law.

 

[StacyLB]

You're running into an issue that most employees don't realize--direct deposit allows employers to put money in AND take it out.

 

[cbg]

"direct deposit allows employers to put money in AND take it out."

But only within limits. They cannot just reach into your account and take out whatever they please. And while they can reverse a direct deposit, it's either all or nothing; they can't take out either more or less than the exact amount that the deposit they put in.

 

[StacyLB]

I certainly didn't intend to insinuate that they could arbitrarily take money out. From my experience, employees don't understand that money can be taken out at all--regardless of circumstance.

 

[cbg]

I know you didn't intend to imply that, Stacy; just wanted to make it clear for the benefit of any readers of the thread. Of course I know you know better.