Direct deposit is a popular payment method that many trucking companies use to pay their employees. With direct deposit, employees’ paychecks are automatically deposited into their bank accounts on payday. However, there may be instances where a trucking company needs to reverse a direct deposit such as giving an employee the wrong amount or accidentally paying a different employee. In this article, we will explore how to reverse a direct deposit in the context of trucking payroll.
Step 1: Determine if you are able to request a reversal
You can request a reversal if:
The reason is in compliance with ACH or EFT laws.
The direct deposit reversal fee of $75 has caused the total amount to exceed $50.
The direct deposit paycheck was not declined.
The reversal request must be made within 5 banking days in the US or 4 banking days in Canada after the paycheck date.
The employee’s bank account, from which the funds are to be reversed, must still be active and have the funds available.
You will need to work with your employee on directly getting the money back from them if you don’t meet the criteria above.
The National Automated Clearing House Association (NACHA) determines the time frame in which a request to reverse a transaction must be submitted. It must be “transmitted or given access to the RDFI within five banking days of the date of settlement of the incorrect entry,” according to NACHA.
Step 2: Submit a Direct Deposit Reversal Request form (74-191)
It is essential to complete all sections of the form when canceling a payment request. click here for form 74-191
Payment services will not process incomplete requests.
Confirm the receipt of your cancellation request by calling payment services.
The notification to the payee must follow the format specified in the instructions according to NACHA guidelines. This notification is mandatory, and you are not requesting approval.
Submitting this form to payment services confirms the accuracy of the provided information, including the justification for the reversal.
The organization making the request should retain a copy of the cancellation form or its original.
Your request will then be reviewed. You will need to wait about 9 banking days before knowing if your reversal has been accepted or rejected. Agencies may not contact a payee’s financial institution to request that an incorrect direct deposit payment be returned. NACHA rules require electronic reversals via the ACH network and by the payment’s originator (Comptroller). To assist in tracking the payee’s direct deposit payment, an agency may contact the payee’s financial institution.
Successful Reversal:
When the funds are received by the Comptroller’s office, Payment Services sends a secure email notification to your agency’s Direct Deposit Bill or Payroll Coordinator that the funds have been returned. The email only includes the payee’s name and the amount of the reversal request (s).
Unsuccessful Reversal:
When funds are not returned by the payee’s financial institution, Payment Services notifies the Direct Deposit Bill or Payroll Coordinator via email. The email contains the Return Code as well as a description of why the funds were not returned.
To recoup an incorrect direct deposit payment, your agency must contact the payee directly if:
When the payee’s account is closed or there are insufficient funds in the account, the request is not honored. NACHA rules require the entire amount to be reversed and for partial payments to be returned.
The agency discovers the incorrect payment after the NACHA reversal deadline has passed.
Useful Information:
It is important to note that reversing a direct deposit should only be done in cases of overpayment or incorrect payment amounts. If the direct deposit was made correctly and the employee’s pay is correct, the trucking company should not attempt to reverse the deposit.
To avoid having to reverse direct deposits, trucking companies should take steps to ensure payroll accuracy. This includes verifying employee hours worked and looking for any errors in pay rates or bonus payments.
In addition, trucking companies should communicate effectively with their employees about their pay. This includes providing clear and accurate pay stubs that show the details of each paycheck, including any deductions or taxes.
Bottom Line:
To summarize, reversing a direct deposit is a complicated and time-consuming process, but it is possible. To begin the reversal process, trucking companies should act quickly and effectively communicate with their payroll department or service provider. Reversing a direct deposit should be done only in cases of overpayment or incorrect payment amounts, and only with the employee’s permission. The trucking company should be prepared to pay any reversal fees. Trucking companies can avoid the need to reverse direct deposits in the future by taking steps to ensure the accuracy of their payroll and communicating effectively with their employees.
Written by Mike Ritzema
Before founding Superior Trucking Payroll Service, Mike was the CFO of a trucking company with 80 trucks and a thriving brokerage. This experience gave him the perspective that a payroll solution has to make the lives of the office people better. All the solutions he has designed are to benefit everyone. Our company mission is to help trucking families and that includes the company owners, the drivers, and the office.