FYI: Beware of Automatic Payroll Deposits

The Ghost of FReepers Past

[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.

[jsh3180]

""If your employer pays you with a check, he can stop payment on it for any reason he chooses, too.""

Hmmmmm......In Florida it is illegal for an employer to put a stop on an employees check.

What state are you in?

[SoothingDave]

If an employer takes your pay right out of your checking account -- unauthorized -- you are fine with that?

You must have some type of comprehension problem. No one is saying it's "fine" to have an employer "take back" a direct deposited paycheck or to hold it "hostage" to coerce an employee to sign something.

Direct deposit is not the culprit here, it is the employer. Both things you describe sound to be actionable at least under civil, if not criminal law.

SD

[teenyelliott]

If an employer takes your pay right out of your checking account -- unauthorized -- you are fine with that?

Of course not. I never said any such thing.

All I said was that I never saw anything like that happen. I simply do not think it is a common occurrence.

I have seen many people who had gotten paid with a hot check, though. And there is absolutely no recourse for them, short of suing the employer.

[Eaker]

Direct deposit is great until your employer violates the terms.

Driving is great until you have a wreck.

This is much more likely to happen and be much more significant, so should we quit driving too?

[newgeezer]

My point has been and remains that there appears to be little if any additional risk with direct deposit over a paper check.

If it is in fact legal for an employer to reverse a direct deposit and illegal for him to stop payment on a paper paycheck -- nevermind that "for any reason he chooses" garbage -- it would seem legislators have some catching up to do.

[newgeezer]

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.

No, it isn't. He can only take back the money he put into your account. If you were to start putting direct deposits into his account, you'd probably have "access to his account" for 5 days hence, too. And, to the extent either of you steals what rightfully belongs to the other, the legal system awaits.

{sigh} Your original post said, "Do NOT sign up for this unless you really trust your employer."

So, let's say I don't "really trust" my employer. Should I feel better if I'm paid with a paper check?

[SoothingDave]

You're sounding very sensible today. Maybe I better go lie down. ;-)

SD