California employer drains employee’s bank account, leaving it -$3200 for 2 weeks after accidentally overpaying him, then withdrawing way more than the overpayment without warning

• My employer made a payroll mistake and pulled $8,000 from my personal bank account without warning

  Titan5_Overlord

  Location: California

   

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  Employee checking his phone with a serious expression

  _{Image is representative only and does not depict the actual subjects of the story.}

• Last Friday my company accidentally deposited an extra three thousand dollars into my checking account alongside my regular twenty-five hundred dollar paycheck. I noticed the error immediately.

• First thing Monday morning I sent a written email to our HR manager and payroll department pointing out the mistake and asking for the proper procedure to return the three thousand dollars. I received an automated reply saying payroll was out of office.

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  Man focused on his phone

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• thursday night I logged into my bank app and saw that my checking account was negative thirty-two hundred dollars.

• Instead of pulling back the three thousand dollar overpayment, our payroll department initiated two separate reverse wires. They pulled the original fifty-five hundred dollar deposit and then another three thousand dollars on top of it. They completely DRAINED my personal savings, triggered five overdraft fees, and bounced my automatic mortgage payment.

• I called my HR director in a panic this morning. She told me that their direct deposit agreement gives the company full authority to reverse erroneous transactions at their discretion, and that they will reissue my actual paycheck on the next scheduled cycle in two weeks.

• My bank is telling me this was an authorized ACH reversal from my employer, while my employer is acting like leaving an employee with negative three thousand dollars for two weeks is just an administrative inconvenience. I should of never signed up for direct deposit with this place.

• Can an employer legally pull more money than they overpaid and refuse to fix the negative balance immediately?

  Titan5_Overlord

• Companies love their processes and their agreements, and they love saying “the system allows it.” What they do not love is admitting the system is designed to screw the employee and keep the company safe. They could fix this in a day, but they won’t.

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• Banks call it an authorized reversal, and HR calls it standard procedure. And the name isn’t important for any part of this because whether it’s called this or called that, what happened was an account was drained because someone in payroll wasn’t able to type numbers correctly.

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• This is just another reminder that the employee-employer relationship is rigged. You sign up for direct deposit thinking it is a convenience, and it turns out it is also giving them a direct line to your bank account. They can pull money when they want, however much they want, and you just have to wait while they figure it out. 

  The agreement protects them. Not you. You are the one with overdraft fees. You are the one with a bounced mortgage. They are the ones who made the mistake. But you are the one paying for it. And while that’s nothing new, it can still raise the temperature on my forehead to next-to-boiling.

  To me, this story is about privacy. A Boss basically pickpocketing a worker through a computer. Reaching into a personal account and taking money without asking is bad sci-fi.

  We don’t get to reach into the company account when they underpay us. That has legal repercussions. We have to file a claim. Blah blah blah. Wait. Yadda yadda yadda. Hope someone processes it. Etc etc etc. But they can drain your savings on a whim and say the agreement allows it. That’s not just one-sided. That’s the power imbalance of administrative process in all its glory.

  
   

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