This Bulletin Supersedes Payroll Bulletin No. 422.1

Purpose:

The purpose of this Bulletin is to notify agencies of the procedures to be used when requesting a direct deposit reversal.

Affected Employees:

Employees with a direct deposit are affected.

Background:

Generally, the State payroll is confirmed one week prior to the check date. This allows sufficient time for the checks and direct deposit advices to be printed, delivered to agencies and distributed to employees.

When an employee is enrolled in direct deposit, funds are automatically deposited into the employee's checking or savings account. Agencies cannot use form AC230, Report of Check Returned for Refund or Exchange, to process a paycheck reversal for employees in direct deposit until the funds are successfully recovered or a Bank Check or Money Order is received.

After paychecks are confirmed, if an employee is inactive and it is determined they are not entitled to the funds in a paycheck distributed via direct deposit, agencies must use the AC3197, Request for Direct Deposit Delete/Reversal, to delete or reverse the direct deposit transaction. Per NACHA regulations a direct deposit reversal can be processed for up to 5 business days following a check date. 

By enrolling in direct deposit, the employee and any joint account holder allows the State, through the financial institution, to debit the account to recover any salary to which the employee was not entitled or that was deposited to the account in error. Refer to the authorization on the AC2772, Direct Deposit form for further information.

Effective Dates:

Immediately

OSC Actions:

OSC will initiate the AC3197 requests received prior to 1:00 pm daily. If the funds are recovered, OSC will notify the agency via the Payroll Check Notification Report. Please see Payroll Bulletin 2243.2 for details on this report. 

Agency Actions:

Agencies should send the AC3197 request to the DD Returns and Reversals mailbox. One form should be submitted for each check date. AC3197 requests should be submitted as soon as possible, however, per National Automated Clearinghouse Association (NACHA) regulations a direct deposit reversal can be processed for up to five business days following the check date.

The corresponding AC230, Worksheet for Paycheck Reversal or AC 1476, Report of Check Exchange should be submitted to the Payroll Reversal and Exchange mailbox consecutively with the submission of the AC3197 form. Refer to Payroll Bulletin 2272 for information on the AC230 process.

Agencies should notify the employee of actions taken and make the appropriate cancelations or updates to the employee's direct deposit record in PayServ if necessary.

If it is later determined that the employee is entitled to the funds a notification must be sent to OSC immediately so a paycheck reissue can be processed as soon as possible. 

Questions:

Questions regarding this bulletin should be directed to the Direct Deposit Returns and Reversals mailbox.