Suppose, for example, an employer in the United States deposits employees' paychecks directly into their bank accounts. If they determine (whether correctly or incorrectly) that a former employee was paid more than they should have been due to a payroll error, is there any (legal) mechanism by which they could take the alleged excess pay out of the former employee's bank account without the former employee's consent?
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Usually, when you sign up for direct deposit you have to sign a form giving your consent. This contains a clause which allows the company to make withdrawals up to the paycheck amount, in order to correct any errors.
In short, if you signed up for direct deposit then you have already given your consent for them to fix errors by withdrawing money.
If you do not consent (and therefore do not get direct deposit), they will usually require you to write a check to the company for the difference.
Nosjack
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Note that many large companies don't offer any other payment methods, so you are bound to use direct deposit (or work for free or get another job).
I have never signed anything, and from the people in HR I know they would never do that (taking money back). If you owe them a correction, they (snail-)mail you about it, and give you thirty days or more to correct it. The assumption is that the moment money gets into your account, you trusted it's yours and spent it immediately.
Update: after some googling, it seems that such forms typically/often(?) do authorize 'appropriate corrections/debits'. See for example this Intuit template that comes with Quicken: https://http-download.intuit.com/http.intuit/CMO/payroll/support/PDFs/Misc/DD_Form.pdf.
Second update: many states have laws that allow the employer to enforce direct deposit. See for example https://www.patriotsoftware.com/payroll/training/blog/can-employers-make-direct-deposit-mandatory/ for a map (scroll down one page). Overall, 82% of all employees use direct deposit.
Aganju
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It depends on the clause of the Direct Deposit agreement.
Some Direct Deposit agreements include a clause including permission to make withdrawals, the actionary phrase may be as simple as 'I permit {organisation} to deposit and withdraw on my account'.
If there is no withdrawal authorization provided, such things as correcting overpayments or incorrect deposits are handled through normal banking procedures.
Willtech
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Personal: A company I had worked for erroneously posted two checks to my direct deposit. There was also a debit in my account, for correction. So I can not say if it is a withdrawal per se, or just a reversal of the electronic money transfer.
insipidlight
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paulj
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No, direct deposit doesn't permit withdrawal. But keep in mind that every company or person performing transactions can file for a withdrawal of same amount that they deposit. However their is a limited time period after which banks will revoke the ability to even reverse the transition. [ Won't apply if court or police is involved ].
Read this government article on 5 myths of direct deposit for additional information. https://www.tpsgc-pwgsc.gc.ca/recgen/dd/prom-1-eng.html
primegxy
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While the company may be able to take money back from your account, they still have to pay your salary. For example if the company decided to lower their salary, they have no right to do that and take their money back from your account.
In an extreme case, if the company was going bankrupt and decided to take money from your account to pay someone else, I believe law.stackexchange.com would tell you they are in trouble.
gnasher729
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