It’s payday and you get a worried call or email from one of your employees. He says he checked his bank account and he wasn’t paid. He then tells you that he needs to pay his bills and that he lives paycheck to paycheck. How do you investigate and resolve this? A great way to minimize payroll errors is by using a single-source online solution like Dominion Systems. With Dominion, you have your payroll, time and attendance, and other HR processes streamlined together on the same platform. An all-in-one payroll solution improves accuracy, cuts dual-entry and makes your time spent on payroll more efficient. Enable your employees to fill out their direct deposit in the online Employee Self Service Onboarding process to minimize errors. In the 2017 “Getting Paid In America” survey, 93.74% received their pay via direct deposit. It’s no surprise this number is very high and as any payroll professional knows, mistakes happen and you need to be prepared for when they do. It becomes important to resolve the problem as quickly and efficiently as possible. Here are a few tips, specific for Dominion Clients, to help troubleshoot a missing direct deposit payment.
General Version: Tips to Troubleshoot Your Employee's Missing Direct Deposit Payment
Confirm the Pay Date
Often times, errors happen due to simple mistakes. It might sound obvious, but make sure you double-check that the pay date hit. You might have entered the wrong date when processing payroll or you might have submitted a “special payroll” and not the normal one. Did you give yourself enough time between the process and check date? Your ACH bank could be a factor and have different processing windows. Weekly and bi-weekly payrolls typically fall on the same day, but they can be affected by holidays. Semi-monthly (15th and last day of the month) payrolls can be trickier since weekends will often push a date forward. Check the calendar, and if it is past or on the payday move on to the next steps. Keep in mind the banks technically have until 5 PM of the pay date to deposit the money into the accounts, but if your gut says your typical payroll pattern (of payments hitting in the morning) is off, it’s great to be proactive and look into the case.
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Review Your Payroll Reports
Was the employee actually paid? Look at the necessary reports for that check date that will show you the employee’s pay information. Ensure the employee received a net payment. You will also want to make sure the employee was paid the correct amount. An accidental reduction of wages--coupled with taxes and standard deductions--could result in a net check of $0.00. If a deduction amount such as a 401K, changed, it could affect the employee’s ability to receive a net.
In Dominion’s payroll software, run the “Payroll Check-At-A-Glance” report found under Standard Reports. You might notice the employee isn’t on this list, which means they weren’t paid at all through payroll with this check date. If they are in this report, look at the Description category and you will see how they were paid. The Check Register or the Direct Deposit Register found under Standard Reports are also good reports to look at to see specific information regarding a paper check or direct deposit payment. The Direct Deposit Register will show you the trace number (transaction identification number you will want to share with the ACH bank) and the transaction type (savings, checking, prenote). If the transaction type is prenoted, you will need to figure out another payment method for these particular employees.
What Does Prenote Mean?
The prenote option is a test transaction that gets sent to the bank to make sure that the provided employee account information is valid before setting up a direct deposit transfer to pay the employee. Employees must be paid to actually send the zero test file. If they are not paid, it will not send a test file.
Note for Dominion’s Software: If you make any changes to a direct deposit account, it will automatically prenote that account again, unless you manually uncheck that box. The prenote box will stay checked while the transaction runs through a payroll. Once the next payroll is opened, the prenote box checked will automatically be removed.
If prenoted, an employee will automatically get assigned a paper check, or if they have an additional account set as 100% of Net, then the funds will go there. Make sure to look at the account information against what the employee input.
Confirm Payment Method
How should the employee be receiving their paycheck? Does the employee typically get their payment through direct deposit, a paper check, or a pay card? If the direct deposit is missing, confirm the employee's bank account information is correct. Does the banking information provided match what was used for the payment? Did the employee change banks or close their account and not notify you? Do they have holds on their account? Has the employee been paid into this account before? These questions will be able to further your investigation. For Dominion clients, the employee direct deposit setup is done through our Onboarding software, specifically the Employee Self Service Onboarding process. This information is then sent to the employee’s Employee Self Service portal. The company admins can access their information on the Employee page, which is where you will want to check their account information, as well as add an employee’s direct deposit information.
Analyze the Scope of the Problem
If everything matches and the employee still claims he was not paid, the next step is to see whether more employees were affected. As an admin, you can quickly check your own payment to make sure it was received. If you were paid, then the whole payroll ACH file probably wasn’t affected and it’s something with this specific employee’s bank or personal account. If you weren’t paid and you have received multiple frantic calls and emails, then it’s possible something affected your entire file. Contact your service provider for further help.
Dominion’s Client Solutions Department
If you’re a Dominion client, contact our client solutions department by using our chat feature, emailing us at email@example.com, or calling 616-248-3834. Our client solutions team will help you investigate the situation and if need be, give you the ACH File Change/Delete Request form to fill out to try and reverse or delete the employee’s direct deposit if you paid them via paper check. Keep in mind that this can be a risk your payroll provider should make you aware of, and that it might be after your ACH bank’s cut off time. Please be aware that Dominion can only see the file we send, we cannot see into a bank account or see if there was a kickback to the company’s account. In this instance, you’d want to contact your ACH bank. If you don’t know who your ACH bank is, Dominion can look it up and tell you.
Involve the ACH Department
As previously mentioned, have the employee’s direct deposit trace number handy, from the Direct Deposit Register report, to give to the ACH bank. If they cannot find anything, then contact the employee’s bank so they can search for the transaction. They might also request the amount and the account. They will be able to see if it will be posting shortly or not. Again, banks technically have until the end of the business day for deposits to hit. If the bank account did not match, it’s more than likely that those funds will be returned to the Employer’s payroll funding account. When a wrong account is used, those funds commonly cannot be posted and will be returned to the originating bank, aka your company account. There is a small chance the account belongs to someone else, in which case, contact your payroll provider to walk you through an ACH reversal.
Consider Alternate Payment Options
With a thorough investigation with the help of resources from your service provider, ACH departments, and tools you have on-hand, it’s time to consider how you are going to pay the employee their money. You have a couple options and, realistically, it depends on why the direct deposit didn’t go through. The easiest and most convenient option would be to print a paper check for the employee and deliver in person or via mail. You could also wait until you process payroll next, but this could be a couple weeks later. Another option is sending a “same day” ACH file for that single employee. This usually costs more, but it is a good way to go to send the direct deposit with updated account information.
If you use a payroll provider like Dominion, the client solutions team will be able to help you adjust the employee’s payment in the software, if needed. You might need to create a couple adjustments or update the employee’s direct deposit account information. For all of you Michigan payroll processors, we are conveniently located in Grand Rapids, MI if you need Dominion to print a check for you.
Your employees want to be paid on time as expected, error-free. Dominion believes the best way to reduce payroll errors is to use a single-source technology solution. For example, your payroll would be tied to your time and attendance management and employee self service data. This increases the likelihood that payroll and the information provided by your employees will be correct and error-free.