Bounced Paycheck

SkyHog

SkyHog

Touchdown! Greaser!
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Everything Offends Me
Someone close to me (not my wife) just had their paycheck bounce. They make very little money, and because of the bounced paycheck, their checking account went negative, so they have some NSF fees.

He is scheduled to work today. If he refuses to work until they reimburse him, can they fire him? Moreover, can he demand the NSF fees be reimbursed and have a legal ground to stand on?

I would assume he won't be staying at the job any longer than it would take to find another job, but he can't just quit. At the same time, going back to work would essentially be working for free at this point....

For reference, its a small franchisee of a large corporation that he works for.
 
Fool me once, shame on you. Fool me twice, shame on me.

I know that isn't a direct answer, but if I were your friend, I would be looking for another job, UNLESS this was truly a one time event.

As to the rest, I really wouldn't know how to answer.
 
I had that happen once. My employer made it and the fee for his returned check good. I hadn't written any checks against the expected amount.

As for the issue of writing checks against your paycheck that hasn't cleared yet, that's a bit more gray. I know a lot of people do it, but it's not a good idea.

The "proper" way to do it is to deposit your check, wait until it clears, and then write checks from your account. This is why direct deposit is such a good idea - you have the money, spendable, on your payday.

Depending on the state, I'd not be surprised to learn that the employer is NOT liable for anything other than the amount of the check, and the fee charged the employee by the bank to return that check. Other fees incurred from checks the employee wrote are the employee's problem.

Now, since automatic bill payment is popular, it's possible that some states have friendlier laws that make the "bouncer" responsible for all the downstream consequences, but I'll bet they're rare. The only time I know of a case where the downstream fees being covered was in the case of check fraud, where the check actually cleared the bank, was "spendable", and then all of that got reversed when the fraud was discovered.

Strongly suggest your friend get direct deposit.
 
SkyHog said:
He is scheduled to work today. If he refuses to work until they reimburse him, can they fire him?
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It's called 'at will employment', they can fire him for any reason that is not specifically protected (race, gender, national origin etc.). They would still owe him wages.

For reference, its a small franchisee of a large corporation that he works for.
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He should call up the franchise company and tell them that another of their franchisees has gone broke.
 
Couple of things.

The employer doesn't offer direct deposit unfortunately. His bank automatically makes the funds available, so there's no easy way to tell when the check clears. In this case, the money was later taken away because of the bounced check, putting him negative.

Other employees say this happens a lot, and they have learned to just cash the checks at Walmart to avoid the hassle.

TMetzinger said:
I had that happen once. My employer made it and the fee for his returned check good. I hadn't written any checks against the expected amount.

As for the issue of writing checks against your paycheck that hasn't cleared yet, that's a bit more gray. I know a lot of people do it, but it's not a good idea.

The "proper" way to do it is to deposit your check, wait until it clears, and then write checks from your account. This is why direct deposit is such a good idea - you have the money, spendable, on your payday.

Depending on the state, I'd not be surprised to learn that the employer is NOT liable for anything other than the amount of the check, and the fee charged the employee by the bank to return that check. Other fees incurred from checks the employee wrote are the employee's problem.

Now, since automatic bill payment is popular, it's possible that some states have friendlier laws that make the "bouncer" responsible for all the downstream consequences, but I'll bet they're rare. The only time I know of a case where the downstream fees being covered was in the case of check fraud, where the check actually cleared the bank, was "spendable", and then all of that got reversed when the fraud was discovered.

Strongly suggest your friend get direct deposit.
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SkyHog said:
Other employees say this happens a lot, and they have learned to just cash the checks at Walmart to avoid the hassle.
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The employer sounds like a douchebag if is not the first time. Time to leave that job. Other than suing if they do not reissue the funds I so not think your friend has much of a recourse. The lack of funds may show that the company is out of money. In which case a lawsuit may be a lost cause as there will be no money to pay should your friend win. No matter what though it is time to find a new job.
 
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The employer is gong to have some big problems with the State Dept. of Labor if they don't get their act together.
 
SkyHog said:
Couple of things.

The employer doesn't offer direct deposit unfortunately. His bank automatically makes the funds available, so there's no easy way to tell when the check clears. In this case, the money was later taken away because of the bounced check, putting him negative.

Other employees say this happens a lot, and they have learned to just cash the checks at Walmart to avoid the hassle.
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What state is this person in? I know in California that employers are required to have money in the bank to cover payroll checks and the employer can be on the hook for penalties; here is one reference re California employee rights: http://www.las-elc.org/factsheets/paydays.pdf
 
weilke said:
He should call up the franchise company and tell them that another of their franchisees has gone broke.
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That would probably be the most effective course of action for getting paid what is owed, although just telling them the facts would probably be much wiser than saying the franchisee "has gone broke," which could drop the employee in a bucket of brown unless s/he knows that for a fact (one bounced check does not a bankruptcy make). Next best thing would probably be contacting the state department of labor, as there are protections for workers reporting labor violations. Not showing up for work could easily be interpreted as an informal but irrevocable resignation, so unless s/he really wants to not work there any more, s/he should continue working during the resolution of the issue -- I don't think (and Adam can confirm) that this will waive any rights s/he has to past and continuing pay for work performed.
 
SkyHog said:
Couple of things.

The employer doesn't offer direct deposit unfortunately. His bank automatically makes the funds available, so there's no easy way to tell when the check clears. In this case, the money was later taken away because of the bounced check, putting him negative.

Other employees say this happens a lot, and they have learned to just cash the checks at Walmart to avoid the hassle.
Click to expand...

In this case (the bank took the risk of making the funds available), the employer or the bank should be liable for the fees, the depositor should not.
 
Just FYI: doing a Google search for "bounced payroll check" seems to yield a lot more useful information than asking here.
 
I am really glad I'm at a point in my life where I have no friends working the counter at Burger King.
 
steingar said:
I am really glad I'm at a point in my life where I have no friends working the counter at Burger King.
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I know right? People that work in entry level jobs at 18 years old are scum. I mean, how could I associate with someone that serves a purpose to the community?
 
SkyHog said:
I know right? People that work in entry level jobs at 18 years old are scum. I mean, how could I associate with someone that serves a purpose to the community?
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Sorry Nick, that was a bit mean of me. But if I have lots of 18-year old friends at my age, there is definitely something wrong with me. I just had another birthday yesterday to remind me how old I'm getting. All the gray hair doesn't help.

It might be that if you are a bit old to have lots of 18 year old friends, but I genuinely don't know your age or situation. Yes, your friend should find another place of employment with better financial reserves.
 
steingar said:
Sorry Nick, that was a bit mean of me. But if I have lots of 18-year old friends at my age, there is definitely something wrong with me. I just had another birthday yesterday to remind me how old I'm getting. All the gray hair doesn't help.

It might be that if you are a bit old to have lots of 18 year old friends, but I genuinely don't know your age or situation. Yes, your friend should find another place of employment with better financial reserves.
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Fair enough - I was a bit harsh in response too. If it helps, this is a family member, and not really a "friend" per se.
 
SkyHog said:
Fair enough - I was a bit harsh in response too. If it helps, this is a family member, and not really a "friend" per se.
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Unfortunately, I have a number of family members either under or unemployed. My own brother, a pharmacist with 30 years experience, is one of them.

Your relative should be in school at 18, but it sounds like the financial situation isn't there for him. One hopes that the family can tide him over until he can get a job with someone not a deadbeat.
 
steingar said:
Sorry Nick, that was a bit mean of me. But if I have lots of 18-year old friends at my age, there is definitely something wrong with me. I just had another birthday yesterday to remind me how old I'm getting. All the gray hair doesn't help.

It might be that if you are a bit old to have lots of 18 year old friends, but I genuinely don't know your age or situation. Yes, your friend should find another place of employment with better financial reserves.
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I see no reason someone of any age can't have a friend that is 18 years old or younger. What you're saying makes absolutely no sense. I sure hope I never get to the point where I think I'm better then someone younger and shouldn't be friends with them simply because they are younger then me or make less money. Wtf.

I'm also glad that successful people much older then me befriended me when I was young and needed guidance.
 
jesse said:
I see no reason someone of any age can't have a friend that is 18 years old or younger. What you're saying makes absolutely no sense. I sure hope I never get to the point where I think I'm better then someone younger and shouldn't be friends with them simply because they are younger then me or make less money. Wtf.

I'm also glad that successful people much older then me befriended me when I was young and needed guidance.
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Sorry, if I'm guiding a younger individual, I'm not their friend, I'm their mentor. Very different relationship. I mentor many, many young people. Part of my job.

The issues confronting an 18 year old are very, very different than those confronting an old codger like myself. So are the experiences. Honestly, I can't imagine what we'd have to talk about. It is fairly natural for an older fellow like me to associate with those from my own generation.
 
I have young friends also. I think the best is teaching them sneaky ways to get back at jerks.

Someone has to teach the children that "“Old age and treachery will overcome youth and skill”. :)
 
jesse said:
I see no reason someone of any age can't have a friend that is 18 years old or younger. What you're saying makes absolutely no sense. I sure hope I never get to the point where I think I'm better then someone younger and shouldn't be friends with them simply because they are younger then me or make less money. Wtf.

I'm also glad that successful people much older then me befriended me when I was young and needed guidance.
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I was going to say this too.

Like, is there a cutoff? I have friends who are young. I'm 32 - at what age am I too old to make friends with younger people?
 
kimberlyanne546 said:
I was going to say this too.

Like, is there a cutoff? I have friends who are young. I'm 32 - at what age am I too old to make friends with younger people?
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Hanging out with toddlers? That would be the same age disparity as me hanging out with teenagers.
 
How you going to encourage the next generation to fly if you're not hanging out with people 20 years younger than you?
 
steingar said:
Hanging out with toddlers? That would be the same age disparity as me hanging out with teenagers.
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denverpilot said:
How you going to encourage the next generation to fly if you're not hanging out with people 20 years younger than you?
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Have you seen his posts in the spin zone? You do not want him influencing young people. :rofl:
 
Geico266 said:
Have you seen his posts in the spin zone? You do not want him influencing young people. :rofl:
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I had to stop my activity in the SZ. Way too much crazy in there. I'm all stocked up here, as the movie line said...
 
A reputable employer would be apologizing 6-ways from Sunday, making a cash payment for the last bounced check plus any documented fees, maybe giving a gift certificate for dinner....... and watching things a whole lot closer after that. That's what I would do (I'm a small-time employer).
_hit happens but its how you handle it that makes the lasting impact.
You also have to consider this could be an accountant error or other employee goofing up and not management.
 
denverpilot said:
How you going to encourage the next generation to fly if you're not hanging out with people 20 years younger than you?
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One doesn't need to "hang out" to mentor. But I fully agree with those claiming my own thought processes are inappropriate for younger audiences. I start every class telling my students that their university has taken leave of its sense and asked me to instruct them.
 
It was said at earlier in this string, but I don't think it has enough emphasis.

Call the State Attorney General's office. There are laws specifically designed to make sure that wages are paid in a timely manner, and the laws have harsh penalties. One call from the AG to the employer and he/she will see the light right quick....

Do this, Nick!

-Skip
 
AdamZ said:
The employer is gong to have some big problems with the State Dept. of Labor if they don't get their act together.
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THere is potentially a larger issue here.

If the employer is bouncing paychecks then the employer is very likely to be failing to file witholding taxes (income, SS, Medicare). Those are usually the first things that are skipped/bounced, rent next, employees last. This person may have much more trouble ahead if employer is not filing & paying witholding.

Depending on the state, the State Department of Labor or the Attorney General would be the right place to go. BUt I might start at the franchise company as they have a vested interest in the situation.

Oh, and make sure he knows that when one of the government agencies gets involved, it's more likely than not that the place will be shut down.
 
wsuffa said:
THere is potentially a larger issue here.

If the employer is bouncing paychecks then the employer is very likely to be failing to file witholding taxes (income, SS, Medicare). Those are usually the first things that are skipped/bounced, rent next, employees last. This person may have much more trouble ahead if employer is not filing & paying witholding.

Depending on the state, the State Department of Labor or the Attorney General would be the right place to go. BUt I might start at the franchise company as they have a vested interest in the situation.

Oh, and make sure he knows that when one of the government agencies gets involved, it's more likely than not that the place will be shut down.
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I read this elsewhere on the internet as well, but no answer to this:

If the employer is not paying withholding, does it then become my friend's responsibility to pay it to the IRS later?
 
SkyHog said:
I read this elsewhere on the internet as well, but no answer to this:

If the employer is not paying withholding, does it then become my friend's responsibility to pay it to the IRS later?
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Nick, I don't think so. The employer withheld the tax money, and so it is the employer who is responsible, not the employee. The IRS takes a very dim view of employers who fail to deposit witheld taxes to the IRS as it was never the employers money in the first place! I had an acquaintance who did this very thing (who happend to live in ABQ) and got hammered by the IRS. They threatend to lien everything he owned, and garnish his wages, until he agreed upon a payment plan. I don't think they ever went after the employee for the non payment of taxes.
 
stagecoachco said:
Nick, I don't think so. The employer withheld the tax money, and so it is the employer who is responsible, not the employee. The IRS takes a very dim view of employers who fail to deposit witheld taxes to the IRS as it was never the employers money in the first place! I had an acquaintance who did this very thing (who happend to live in ABQ) and got hammered by the IRS. They threatend to lien everything he owned, and garnish his wages, until he agreed upon a payment plan. I don't think they ever went after the employee for the non payment of taxes.
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I have a relative who experienced this from the employee side. His employer didn't forward the witheld Ohio income tax during the process of going broke. My relative had paystubs for the entire time that showed the tax as witheld, the state wanted none of that. They told him that he is responsible for the tax and that it is just tough luck that he worked for a crook. The whole thing went through the courts for about 2 years until he settled with them. He had to pay up a years worth of state income tax and he is barred from owning any property in Ohio.
 
SkyHog said:
I read this elsewhere on the internet as well, but no answer to this:

If the employer is not paying withholding, does it then become my friend's responsibility to pay it to the IRS later?
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Absolutely, no.

The IRS will be a ton of bricks on the employer, but if the taxes were withheld, the employee gets credit for them.

---

Edit:

Make sure that the check sub showing withheld funds is kept; employers like this are often lax in reporting as well, and/or reporting truthfully.
 
SCCutler said:
Absolutely, no.

The IRS will be a ton of bricks on the employer, but if the taxes were withheld, the employee gets credit for them.

---

Edit:

Make sure that the check sub showing withheld funds is kept; employers like this are often lax in reporting as well, and/or reporting truthfully.
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I think we are missing something. If the employee is paid and the taxes are not remitted to the government, then the above is true. In this case, all we know is that the employee wasn't paid. No income, no taxes due.

Until the other shoe drops.

-Skip
 
Skip Miller said:
I think we are missing something. If the employee is paid and the taxes are not remitted to the government, then the above is true. In this case, all we know is that the employee wasn't paid. No income, no taxes due.

Until the other shoe drops.

-Skip
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Quite right. My response was directed at the person who is paid, but whose employer fails to remit the 941s.
 
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