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.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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