Stopping a Pending Direct Deposit Transaction

The file for ‘pending’ direct deposit transactions is created soon after we confirm the regular MO/BW payroll process. This is usually every other Monday for the BW payroll and around the 24th of each month for the MO payroll. It is always at least 3 days prior to the check date.

Special Situations

In special situations, it may be necessary to stop the pending direct deposit transaction. Approved exceptions are:

  • Campus/Department realizes that an employee will be overpaid and chance for repayment will be unlikely (termination) or overpayment amount is grossly unreasonable.
  • The employee contacts us concerning a personal situation and they want to stop the payment or need to close the account. We don’t usually stop to avoid bank fees.
  • Campus/Department receives notice of employee death prior to check date.
  • The employee contacts us to report possible fraud activity on their account. Normally the bank will take care of this problem for the employee by opening another account.

Issues to be Considered Before We Attempt to Stop the Pending Transaction

  1. REVIEW PAYCHECK DATA!! You first need to determine if the total payment is unearned and the complete DD should be reversed OR if multiple jobs are involved and a partial payment is due the employee so another transaction will need to be processed manually by the payroll office.
  2. Is this person still employed and will you be able to collect the overpayment from a future check. (May NOT be possible at the end of the calendar year – will employee receive any more checks in the current tax year?)
  3. How large is the overpayment? If the employee is still working and is willing to have it deducted from a future check(s), it is much easier to process using adjustment vouchers.
  4. If you stop the transaction for a partial payment, you MUST process an on-line adjustment voucher to replace the payment. Deductions will not be correct if you enter the adjustment in the off-cycle payroll.
  5. The central office must review the deductions that were withheld from the payment. If the employee has tax deferred annuities or wage assignments (child support, garnishments, etc.), the deduction may have to be considered an overpayment if the employee wasn’t due any wages for the pay period.
  6. You will NOT be able to request a replacement payment for the employee until we receive confirmation from the bank that the transaction was returned to IU. Many times this will not be until the actual PAYDATE.
  7. The employee MUST be notified that you have requested to stop their direct deposit to avoid bank fees. The employee may have auto withdrawal from their account that needs to be considered.
  8. If the employee’s account is already overdrawn, it is unlikely that the bank will return the transaction.
  9. If the transaction is going to an account that has been closed, many times the bank will reopen the account instead of returning the transaction.
  10. Transactions entered in the off-cycle payroll process are not considered ‘pending’. They are effective the day we send the file so there isn’t a window of time where the transaction can be deleted. We may or may not be able to retrieve those transactions depending on the employee’s account status.

After taking all these issues into consideration, if you determine it is appropriate to request a stop, please complete the Request to Stop Pending Direct Deposit Transaction form.

Special Note: The period of time we must wait before reissuing a payment is determined by the date the bank is notified to request the DELETE or REVERSE transaction. Usually if the DELETE is requested at least 2 FULL BUSINESS days prior to the CHECK DATE, we should be able to process an on-line prior to the regular check date. If we request to REVERSE the transaction with LESS THAN 2 BUSINESS days prior to the check date, most likely we will not receive confirmation until AFTER the REGULAR CHECK DATE.

Reversing Transactions

If the Total Direct Deposit was paid on a single job record and is unearned and NO payment is due from ANY department for this period, the total transaction can be reversed:

  1. You must have the Name, ID, Check Date, Advice number, and NET pay to be sure you have the correct payment.
  2. EMPLOYEE MUST BE NOTIFIED that they will NOT be receiving DD on the regular check date. The department requesting the stop is responsible for informing the employee.
  3. Review DEDUCTIONS – if employee had garnishment deductions withheld, you MUST contact the Garnishment Coordinator (Kathy). The garnishment payment may have already been sent to the court. If so, this will cause an overpayment.
  4. When notification is received from the bank, the On-Line Check Coordinator (Lisa) will be notified and the original payment will be reversed in HRMS.

If the Direct Deposit transaction amount is incorrect or includes payments from multiple jobs and/or departments, another transaction will need to be processed for payment after this DD is reversed:

  1. You must have the Name, ID, Check Date, Advice number, and NET pay to be sure you have the correct payment.
  2. If employee is receiving payments from multiple job numbers (or departments), ALL departments MUST be aware that DD is being stopped. The requesting department or payroll office should contact or send emails to all concerned departments.
  3. EMPLOYEE MUST BE NOTIFIED that they will NOT be receiving DD on the regular check date. The department requesting the stop is responsible for informing the employee. They should be told that an on-line check will be processed for this check date and determine if it should be mailed or picked up in the payroll office. The employee should be aware that they may have to wait for payment until bank verification occurs.
  4. If the employee received payment from two departments on the original check, the payroll office should enter an on-line adjustment voucher for the second department to process a payment at no charge. This can be handled as an exception to the on-line check rules. It doesn’t have to be picked up and can be mailed to the employee home address since the department did not request an on-line.
  5. Review DEDUCTIONS verify that the adjustment transaction will be enough to cover the same deductions as the original payment. If not, contact PRHELP for assistance. Tax deferred annuities (TDA) are calculated as a percentage based on the taxable gross amount so it is correct for these deductions to be less than the original payment. The same garnishment amount should be withheld if possible.
  6. When notification is received from the bank, the original department will need to process an adjustment voucher to process an on-line check for the correct payment. On-Line Check Coordinator (Lisa) will be notified and the original payment will be reversed in HRMS.

Employee Requesting to Stop Direct Deposit Transaction

  1. If an employee contacts our office requesting to stop a direct deposit due to a problem with their bank account, Direct Bank Coordinator (Michelle/Kelli) will usually talk with the employee to determine the plan of action. Depending on the situation, they may instruct the employee to reopen their account or contact the bank for assistance. If they determine the payment should be stopped, the payroll office can complete the “stop pending” form. In this situation we need to be aware that the bank may NOT be willing to reverse the transaction if we are within the 2 business day window or if the employee has unpaid bank fees.
  2. When notification is received from the bank, On-Line Check Coordinator (Lisa) will be notified and the original payment will be reversed in HRMS. BL or IUPUI will process an on-line check after notification from Direct Bank Coordinator (Michelle/Kelli) and the employee will be notified that the check is available for pickup.