State Agencies Bulletin No. 422.3

Subject
New Process to Request a Direct Deposit Delete or Reversal
Date Issued
March 3, 2025

This Bulletin Supersedes Payroll Bulletin No. 422.2

Purpose:

The purpose of this bulletin is to inform agencies of the new process for requesting direct deposit delete or reversal through PayServ.

Affected Employees:

Employees with a direct deposit are affected.

Effective Date:

Effective March 13, 2025

Background:

Under the current business process, state agencies submit Form AC 3197, Request for Direct Deposit Delete/Reversal, to State Payroll Services through the Direct Deposit mailbox to request a direct deposit delete or reversal.

Under the new business process, state agencies will submit a direct deposit delete or reversal request through the PayServ Worklist; Form AC 3197 will no longer be accepted. Instructions for submitting a direct deposit request through PayServ can be found in the Request Direct Deposit Delete or Reversal Job Aid.

Generally, the New York State payroll is confirmed one week prior to the check date. This allows sufficient time for paychecks to be printed and distributed to employees. 

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.

The Payroll Check Notification Report (See Payroll Bulletin No. 2243.2) will continue to be posted to the PayServ Bulletin Board twice per week and shows the status of all direct deposit delete and reversal requests.

OSC Actions:

OSC’s Bureau of State Payroll Services will review and approve or deny each direct deposit delete or reversal request in PayServ. Approved requests will be processed through NYS’ financial institution, and OSC will notify the agency of the outcome of the request via the Payroll Check Notification Report. 

If the funds are recovered, they will be transferred to the Payroll Reversal and Exchange team for processing. If the funds are not successfully recovered, agencies should work with their OSC Auditor and the Payroll Reversal and Exchange Team to identify the other options for recovery. For questions regarding the AC230 Payroll Reversal process please see Payroll Bulletin 2272, Process changes for Form AC230 - Report of Check Returned for Refund or Exchange.

Agency Actions:

Agencies must: 

  • Identify employees being paid via direct deposit who are overpaid, off the payroll with no future checks anticipated, and for whom no other means to retrieve the overpayment exists.
  • Review the employee’s Request Direct Deposit panel in PayServ, making any necessary changes for the next payroll period.
  • Notify the impacted employee.
  • Submit all direct deposit delete or reversal requests through the Request for Payroll Direct Deposit Delete or Reversal Worklist in PayServ daily, prior to 1pm.
  • Submit the corresponding AC230 Worksheet or Exchange documents to the Payroll Reversal and Exchange team at the same time the direct deposit delete or reversal request is made.
  • Review the Paycheck Notification Report weekly to identify the status of any direct deposit delete or reversal requests. 

Please Note: Per National Automated Clearing House Association (NACHA) regulations, direct deposit deletes and reversals can be processed up to five business days after the check date. Agencies should submit requests as soon as possible. 

Questions:

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