Direct Deposit Reverse
UPDATED: Sep 30, 2022
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Direct Deposit Reverse
My previous employer direct deposited
my yearly bonus, based off previous
year performance on Thursday.
The same day I resigned without notice,
no stipulation that I’m aware of.
The next day, they did a reversal of my
bonus and removed it from my account.
As of today, I have NOT been notified
of the reversal.
Asked on April 9, 2016 under Employment Labor Law, Missouri
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 6 years ago | Contributor
The only critical issue is: was the money actually *in* your account at the time, or was just anticipated, but the transaction had not yet been settled?
If the money was actually in your account, they had no right to get it back: once it was in the account, it was yours. Just as if they had, for example, handed you a bonus in cash, they could not then grab the money from your hand or take it from your wallet, so too, if money was actually in your account, they could not get it back. If this happened, you could sue the employer for the return of the funds (and possibly sue your bank, for an unauthorized transfer).
But bank accounts and direct deposits can be funny things. Sometimes, it looks like money is "in" the account when it's not yet: the money has not fully transfered between banks and the transaction has not been settled. If the money was still, so to speak, "in transit" or being processed, your employer could legally stop the transaction from going through.
So you need to determine the exact timing of the transactions(s) to see what your rights are. For future reference, do not resign the day of a desposit--give it a few more days before you do this, to avoid this situation.
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