overdraft fees

UPDATED: Oct 1, 2022

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overdraft fees

Is an employer in the state of Maryland legally obligated to pay for an
employee’s overdraft fees? The employee normally has direct deposit and payroll
did not do the direct deposit so they have overdraft fees due to auto-pay set up
on their account.

Asked on September 8, 2017 under Employment Labor Law, Maryland


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 5 years ago | Contributor

If the employer was at fault in causing the autodraft, such as by not processing payroll when it should have been processed, they would be liable for the overdraft fees they caused. But if the employer processed payroll correctly and on time and the problem is the employee has not managed his expenses or payments properly, or kept a reserve to cover bills like this, that is neither the employer's fault nor their responsibility. Employer fault is required to obligate the employer to pay these fees.

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