Fees incurred due to payroll nonsufficient funds

[smorgan622]

What is the name of your state? Indiana

In December, my employer had NSF to cover payroll and their checks were returned to my account. My employer did not notify me that these checks would not clear until after the checks had already been returned. I had written my monthly rent check on these funds so this meant that there were not sufficient funds in my account to cover it. This then created a late payment to my landlord and substantial bank charges (almost $300.00).

They originally verbally agreed to pay all these fees and are now saying that they may not pay them.

Is my employer responsible to reimburse me for these fees, both bank and late fees to my landlord, incurred as a direct result of their NSF payroll checks?What is the name of your state?

 

[cbg]

Legally, no, they are not. It would be nice of them to do so but the law is not going to force them to.

 

[ecmst12]

I don't know about that. The DOL may not get involved, but I think if OP were to take the company to court for the fees, he/she would win.

 

[xylene]

I don't know about that. The DOL may not get involved, but I think if OP were to take the company to court for the fees, he/she would win.

Why would the poster get reimbursed for checks they wrote on funds that had not cleared?

This is why it is vital to only write checks from cleared funds and or to have a overdraft credit line, which can really save you.

In the future, I would go to a check store and get cash for the check and put the cash into the bank.

Why?

Because a company having NSF on payroll is a HUGE warning sign.

 

[cbg]

When the poster asks a question in the employment law forums, I answer him based on employment law.

Nothing in employment law obligates the employer to reimburse him for NSF fees. It is the poster's responsibility to be certain the funds are in the account before he writes a check.

IF a court would award him those fees, it is not under employment law.

If he wants to know his rights under consumer law, there is a forum for that on this site as well. The answer may be different. But my answer for employment law was correct.

 

[ecmst12]

Writing checks in expectation of a direct deposit going through is one thing and I would say someone doing so would be responsible if the funds were not deposited. But depositing a live check and having those funds show as available, as well as having a reasonable expectation that a payroll check will not bounce, is all I would expect to be required of a reasonable person. Do most people wait 2 weeks before spending funds that show as "available" in their account, even when those funds come from supposedly reliable sources (i.e. not a cashiers check that you got because you fell for an internet scam)? Do you? I certainly don't.

 

[cbg]

Reasonableness aside, the fact still remains that nothing in employment law is going to force the employer to cover the fees.

I don't disagree that ethically and morally the employer should do so. I do not disagree that small claims court might award it. But he didn't ask the question on a small claims forum; he asked on an employment law board. So unless you're prepared to show me a statute or case law falling under employment law that requires an employer to pay for fees incurred by late paychecks, I stand by my answer.

 

[CourtClerk]

In the future, I would go to a check store and get cash for the check and put the cash into the bank.

Right, then when the next check bounces, the check store can sue the OP for the bounced check and related fees.

 

[xylene]

Right, then when the next check bounces, the check store can sue the OP for the bounced check and related fees.

Why would they have to sue? Are you suggesting the poster is a dead beat? Because there is nothing here to lead to that conclusion.

1 check fee vs. Multiple check fees and rent late fee...

 

[CourtClerk]

Why would they have to sue? Are you suggesting the poster is a dead beat? Because there is nothing here to lead to that conclusion.

1 check fee vs. Multiple check fees and rent late fee...

All of that could be avoided if you don't write checks on funds that have not yet cleared. Then you have no bounced check fees. Really, is it that difficult?

 

[xylene]

All of that could be avoided if you don't write checks on funds that have not yet cleared. Then you have no bounced check fees. Really, is it that difficult?

Perhaps you didn't read the second sentence of my initial post.

And of course their is nothing about you brilliant advice that will instantaneously correct the fact the the OP, like all too many Americans, appears to be living paycheck to paycheck.

 

[Zigner]

All of that could be avoided if you don't write checks on funds that have not yet cleared. Then you have no bounced check fees. Really, is it that difficult?

CC - I think you're off a little on this one. Generally, a person who deposits their paycheck SHOULD be able to rely on that money ACTUALLY being available.
Whether the person is living paycheck-to-paycheck or not...a payroll check can reasonably be expected to be "good".
As was pointed out earlier, this is not some scam that the OP fell for...well, maybe it is...but you know what I mean

 

[smorgan622]

Thanks for your advice and guidance

Thank you for your advice and guidance. I will look into posting in the appropriate forum. Did not realize this would be the wrong one.

Just to clarify (if anyone wants it!) - I had deposited two (2) checks on the same day and didn't write my rent check for almost a week after I deposited them (until I had received a direct deposit of my paycheck from my 2nd job) and the money was still showing available at that time. The fees on my account were from their checks being returned as the banks charge you to take the money back out of your account of course and then for the rent check which is the only thing I had used the funds for. The remainder of the fees incurred was the late rent fees to apartment.

I will look for and post a thread on the small claims forum as was suggested.

Again, thank you for your advice and guidance.

 

[Zoey7879]

In response to all above, I was formerly employed by a nation-wide based collection company that collected primarily against returned checks. While the "moral" thing to do would be for the employer to pay the fees, I don't believe they're obligated to do so. When someone signs a check to receive the money for it, they are taking on the responsibility of the check's validity. Have you tried speaking to the bank about having the fees waived? Not saying that they will, but it's a possibility as I have seen institutions perform this action in the past. I agree completely that the OP should be able to rely on the word of their employer that the funds are available upon the date the check says it's cashable, this is why many banks often withhold deposits for 3-10 days. :/

Good luck to the OP..

 

[underpaid]

Bank charges due to NSF deposit

You can file a police report. This would atl east cause your employer to have to attend a check writting class. When we recieve our pay checks we expect the check to be good. Does your employer have a policy that would address if they received a bad check from a vendor? I work in payroll, and will say that we have never had a check bounce due to NSF. We have had to cancel direct deposit's that have caused similar issues. we just have the employee bring in the bank fee's statement and we reinburse them. You should remind your employer that pay day is pay day - not days later when the check clears.