What do I do if an employee didn't receive their direct deposit?

If there is an issue with an employee's receiving bank account, typically DP will receive a notification from their bank within three business days of the original check date. Three business days may not sound like a long time in abstract, but it can certainly feel like a long time when the employee is waiting for their pay!

Here are some common reasons an employee would not receive an expected direct deposit:

• The account is still being pre-note verified, and a live check was issued.

• The account information wasn't added as "Net Pay" or "Remaining Net", and a live check was issued.

• The account is closed (or frozen).

• The account number is invalid.

• The routing number is invalid.

• The employee's name does not match the account holder's name.

When we receive notification from the employee's bank that they are not able to post the deposit and will be returning the funds to us/you, we send an email to the person listed as the ACH Notification contact on your payroll account, letting you know the reason for the rejection and the amount.

Here are some common methods of getting pay to the employee in this scenario:

• Write the employee a check for the amount of the rejection (this option may include a fee, depending on your billing model),

• Run a payroll to re-deposit funds to a different account on the next business day as a special off-cycle payroll (fees for this option depend on your billing model: PEPM accounts may incur no surcharge, while flat-fee accounts may have a one-time flat fee for up to five employees, with additional per-employee charges beyond that; corrected bank details are required before proceeding),

• Include the funds with the employee's next paycheck (this option does not incur additional fees),

• When reissuing a returned deposit in a subsequent payroll, it is not always necessary to delete or reclassify the earlier payroll as an advance, provided wages and taxes are correct and no improper advance deduction reduces the employee’s pay,

• Issue a temporary paper check for employees without bank accounts until their direct deposit is set up

• Record any manual checks issued as manual transactions in the payroll system to ensure accurate payroll records., or

• Ensure that only the net pay amount is reissued when running a special payroll, as taxes and withholdings have already been processed during the original payroll transaction.

You may issue funds to the employee ahead of our getting an official notification from the bank, but understand that doing so carries the risk that the bank may do a delayed posting to the employee's account, which would result in the employee being paid twice. (We often recommend that the employee call the receiving bank to make sure they intend to return the deposited funds first.)

To avoid duplicate payments, it is strongly advised to wait for official confirmation from the bank that the funds are being returned before issuing a replacement check. This confirmation typically takes 3–5 business days from the original pay date.

To minimize issues with direct deposits, always confirm the employee’s bank account details before processing payments and encourage employees to update their banking information promptly if changes occur.

To inquire about a specific employee's direct deposit, please contact DP Customer Service.