Help! My Paycheck Bounced
Posted: June 22 2020
By: Daniela Bucay
Who among us hasn't incurred a bounced payment or NSF fee in our bank account in the past? Maybe your paycheck arrived late, or you had a bill hit unexpectedly. Just as it's possible for you to bounce a payment to a company, companies (namely, your employer) can bounce payments to you. When your paycheck bounces, it can set off a chain reaction in which you don't have enough cash in your account to cover your other obligations. There are, however, things you can do to minimize the damage and prepare yourself for future uncertainty.
In this post, we'll share tips for how to manage a bounced paycheck, as well as strategies for developing an emergency fund to help weather any unexpected paycheck delays.
Fast Fig Tips:
- Call Your Employer
- Keep Receipts
- Call the Bank
- Deal with the Fallout
- Report Your Employer to the D.O.L.
- Better Call Saul
- Or Just Call Your Boss Again
- Get a Cushion Going
Call Your Employer
All the sources we consulted agree that the first thing to do if you notice your paycheck has bounced is call your employer. This will allow you to suss out if it was an honest mistake (most likely the case, especially if you work for a small business) or something shady.
During the call, stay cool, ask politely, explain the consequences of the bounced check (overdraft fees? late fees for unpaid bills?), and get an estimate on a reissue date. Most importantly, make sure you write down the time and date of the call, who you spoke with, and what steps they said they would take to rectify the situation.
From the first call to your employer, you should be keeping documentation. If you encounter any problems getting your paycheck back, you will need this documentation in order to pursue further action. Here are some things you'll want to keep track of:
- Any calls you make to your employer regarding the paycheck. You'll want to note the time, place (which office you called), name of the person you talked to, and actions promised. If you can, ask anyone you talk to if you can get their email address to send a follow-up email recapping the call.
- Proof of the bounced check. This means bank statements showing the deposit and then withdrawal of the funds, plus additional proof from your bank (see next section).
- Evidence of any fees charged as the result of the bounced check. Again, this means any overdraft fees, bounce fees, or anything else that went wrong with your finances because you missed a paycheck.
- If you're not sure if something in this process merits documentation, stay on the safe side and document it. Write it down, take screenshots, whatever. Keep a folder on your computer or a Google Drive where you can access this and organize it.
Call the Bank
You should call your bank right after you call your employer, making sure to document both calls and start that paper trail. You'll need to call your bank to request proof of the bounced check. Most paychecks are done via ACH, aka direct deposit, and there is a certain set of codes to determine why a transaction bounced, called return codes.
You'll at least want to have bank statements showing the bounced paycheck, but you should also ask your bank to send you a copy of the returned check itself and let you know the return code for the bounce.
Deal with the Fallout
A bounced paycheck is a headache not only because you have to figure out how to get paid, but also because of all the other people you have to call and things you have to do. Here's what we recommend:
- Transfer Internally if you have savings to cover your upcoming expenses. This could be from a different checking account, a savings account, your Venmo or CashApp balance, whatever.
- Call your creditors if you don't have enough money to cover upcoming payments in a different account. This means any mortgage lenders, personal lenders, auto lenders, credit card companies, etc. Make sure you explain the situation, provide any proof they ask, and get in writing that they will not penalize you with fees or negative remarks on your credit history for the missed payment. In addition to calling, you may also want to send this as an email for that paper trail.
- If your creditors are unwilling to move the date, and you want to avoid piling up bounce and overdraft fees, call your bank to turn off automatic withdrawals from your account temporarily. You should let your creditors know you're doing this before you do it, as sometimes that will allow them to budge a little!
Report Your Employer to the D.O.L.
If, for some unfortunate reason, your employer is lagging on giving you your paycheck and the problem persists, you absolutely should contact your state's Department of Labor (D.O.L.) office. You can find your specific state office's information here.
For context, each state has its own laws on repayment, so you'll want to check specifically what applies in your state, but you should still contact the D.O.L. to understand your options better and file a complaint. Usually, employers will take these complaints very seriously, so it can move the needle on its own after you've tried the steps above.
Better Call Saul
Ok, don't actually call Bob Odenkirk and expect him to help you with your missing paycheck. You should, however, call your lawyer or local Legal Aid office. Lawyers are expensive, so if you are on the lower end of the income spectrum, you should 100% go to Legal Aid. You can usually get the info for the appropriate local office from your state's Department of Labor website, or you can try looking on this website. Just make sure you search for pro bono or Legal Aid when researching the lawyers!
Talking to a lawyer is helpful for 2 reasons. First, they'll advise you on what kind of action you could and should take to get your paycheck. Second, employers typically play ball once a lawyer is involved. If they don't, you may need to go to small claims court, but this is really the most extreme solution.
Or Just Call Your Boss Again
If you want to "keep it casual," you can also try calling your employer again after you've done some of the things in this article, even before you get a lawyer involved. They might reconsider once they see that you've been talking to the Department of Labor, and that you're not joking. Keep it professional, brief, and clear, and once again, document the conversation!
Get a Cushion Going
The best way to weather uncertainty is to be prepared, and that means having an emergency fund. It can be hard to save if you're used to living paycheck to paycheck, and saving is a luxury only some of us can afford without careful planning, but there are still ways to squirrel away some money for an emergency. Here are some ideas:
- Try getting emergency assistance from a nonprofit in your area. Many nonprofits have funds to help with housing costs, utilities bills, car costs, etc. if you have demonstrated need.
- Share subscriptions to cut down on recurring expenses. If you have Amazon Prime, Spotify Premium, Netflix, Hulu, HBO, etc, see if you can pool with some of your friends to share the cost of the subscription. You can do family plans which will still come out cheaper!
- Eat "out" at home. This is easier right now because of stay-at-home orders, but generally speaking, you can get a restaurant-quality meal at home for less with not that much effort. For tips on this, see this post.
We hope you never have a paycheck bounce, but if you do, we hope these tips help you take care of it quickly and with confidence. Has your employer ever bounced a paycheck to you? How did you resolve it? We're all ears at firstname.lastname@example.org, Facebook, Instagram, and Twitter.
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