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Can Employer Withdraw Funds from Overpayment?

Can my employer withdraw funds from my bank account without acknowledgment and permission from me? The funds were for an overpayment that they later found and then corrected themselves.


Assuming that the original credit to your account was made electronically via the automated clearinghouse, an employer may, under the clearinghouse rules, reverse an erroneous credit if it was a duplicate payment, a payment sent to the wrong account, a payment the employer did not intend to be made to you, or a payment made for the wrong amount. To comply with the rules, the employer should notify you (mail, telephone, fax, email, or any other method) no later than the date the reversing entry is scheduled to post to your account, and should get the reversing entry to your bank no later than the fifth banking day (that's one calendar week) after the original credit transaction posted.

Published on BankingQuestions.com 4/26/07