Posted on 06/14/2005 8:43:07 AM PDT by The Ghost of FReepers Past
Have you signed up with your employer for an automatic payroll deposit? Then be warned. The employer has access to your bank account for 5 days after the deposit is made. Technically, the employer can only debit your account to reverse an error. BUT IN REALITY, he can debit your account for the full amount of your check for any reason he chooses. Revenge. Coercion. Whatever. Your bank won't care; it's not their problem. His bank won't care, or they may fake it and just not call you back. The ACH people won't care. Mid-America Payment Exchange won't care (it's not their problem -- "contact your employer").
Do NOT sign up for this unless you really trust your employer. And then I still wouldn't sign up for it unless they cannot debit your account for ANY reason. If they make an error, they should have to get your authorization FIRST! Don't repeat my mistake.
Hell, everybody has access to my account. I have direct deposit but I've worked there for 27 years so I **sort of** trust them.
I'm just trying to determine whether the risk is any different with direct deposit than with a check.
Of course, if you really want to eliminate the risk, insist on being paid in cash or, as another FReeper suggested, in gold.
The law probably requires them to do so. Meanwhile, in the non-governmental real world, nobody is going to agree to direct deposit if an accidental extra zero on your paycheck means they have to sue you to recover it.
I've been having my salary direct-deposited with a variety of banks and employers for almost twenty years now, and not once have I had a problem where they had to go and recover money from me. You got hit by lightning, basically - it happens, and I'm sorry it happened to you, but let's not get maudlin.
I would also not have a problem if someone was interested in holding employers to the rules. But they shouldn't be allowed to just snatch your money for any manipulative or vengeful reason they choose. The ACH rules are clear that they do not have that right. But try and get someone to care.
Yes, the rules are supposed to cover only those sorts of situations -- the extra zero, the duplicate, etc. My warning is that in reality, the employer can just take the money for whatever reason he chooses. The employer is protected by exposing the employee to risk. That's not fair, imo. There should be REAL punishment to an employer who breaks the rules.
What's the real difference between that and your employer simply choosing to not pay you at all? As a practical matter, he can decide to not pay you anything this week for whatever reason he chooses, but if it's something stupid, he's probably going to answer for it later.
Let's say I work in payroll and I decide to debit my employer's account a few days early for my pay and just not tell him about it. Would you have a problem with that? Would I have committed a crime?
So if your employer told you that you must sign a non-compete or you would not receive your already earned pay, you would be fine with that? Or if he got mad at you and decided to debit your account on payday for the full amount of your paycheck, you would be fine with that? What if he then held the money until you signed something else he wanted you to sign? No problem? That's just the way payroll works?
Okay, if that situation is either relevant or analogous, I'm missing it.
Wasn't it your intent to imply that there's a risk with direct deposit that isn't present with the old-fashioned paper check?
I've had automatic direct deposit with all but one employer in my life, without incident. However, regarding the one employer who paid by check, I have had a paycheck returned for insufficient funds.
My point is two-fold. There is a risk with direct deposit. That risk is, you give your employer access to your account for 5 days after payday. I would like access to his account 5 days prior to payday then. It is the same thing. I can't take his money without his consent and he shouldn't be able to take mine. I understand about correcting errors, but in reality, that's just a cover. He can take the money if he WANTS to take the money. Period! The rules are worthless if the employer isn't punished for breaking them. I would be punished if I accessed his account, even if I had limited, authorized access to his account, if my access was in violation of the payroll terms.
Yeah. But Banks go after people who write hot checks. There is justice for that in the end.
Dunno, I've used direct deposit for over 30 years and never had a problem. I had to correct payments on two occassions, when I got paid for deployments after I had returned (I initiated action in both cases) and both times they just took it out of the next paycheck.
If I were concerned about my employer possibly debiting my account, I could simply electronically transfer my entire paycheck to a different account. With online banking, I could even set this up to be automated.
I'm not too worried... I'm more valuable to my employer than they are to me (even though they won't admit it).
It's not that simple - you're assuming that you're entitled to the money in the first place. If your employer disputes that, they can refuse to pay and put the burden on you to prove otherwise.
So if your employer told you that you must sign a non-compete or you would not receive your already earned pay, you would be fine with that?
Never had it happen. Never seen it happen.
Or if he got mad at you and decided to debit your account on payday for the full amount of your paycheck, you would be fine with that?
Never had it happen. Never seen it happen.
What if he then held the money until you signed something else he wanted you to sign?
Depends on what it is, I guess. Never had it happen to me, nor seen it happen to someone else.
Sounds like your employer wasn't a very nice person. Looks to me like you should have contacted a lawyer to take advantage of the laws that already exist, rather than wasting your time agitating for a law that's specially designed for the oddball edge cases. Sorry this all happened to you, but there's plenty of law out there to help you already.
Actually, justice may be served in the end. I think the person can file a complaint about a rules violation and they have to process it. Laws were broken here. I hope it works out.
So dangling it over the employees' head just to get their way. That's messed up man.
Actually, perhaps the banks and the ACH people are the wrong folks to call. Perhaps the District Attorney and the police department are better sources.
But for what it's worth, in all my years in banking, I never ever saw this happen.
If someone steals your ATM card and starts using it, you want justice. If someone steals your checkbook and starts forging checks, you want justice. If an employer takes your pay right out of your checking account -- unauthorized -- you are fine with that?
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