Can my employer refuse to reissue payment when it was deposited incorrectly?

Hi Christy,

Thank you for your question. California law prohibits employers from making deductions from the wages of employees for most expenses that are incurred during the regular course of business. (Labor Code, § 221.) In most situations, employers may not make deductions from wages for business losses unless the employer can establish one of two things:

• The business loss was caused by a dishonest or willful act, or
• The business loss was caused by the gross negligence of the employee.

This powerful rule favors employees because it means that employers usually cannot charge employees for things like cash shortages, breakage, loss of equipment, and other business losses that resulted from the employee’s simple negligence.

In your case, it sounds like an incorrectly-deposited check was the result of a simple mistake. As such, the law would most likely require the employer to reissue you a new check.

If you were responsible for the mistaken deposit and your employer can show that you were either dishonest or grossly-negligent in doing so, then maybe they can avoid reissuing you the check.

The real problem is that your employer is in the best position to dispute the incorrectly-deposited check. They can try to cancel the check, file a complaint with their bank, or try to sue the person who incorrectly received the check. You are not in a great position to do those things. As such, I think it’s most likely that a court would find that this type of clerical error is a simple mistake and your employer is legally-required to reissue your check.

It’s worth noting, however, that your situation is somewhat unique. I’ve never heard of this issue before, and it seems unlikely that a random bank account number would actually be successfully deposited. So, although I think the law is probably on your side, I’m not 100% sure how a court would approach it.

In any event, I hope this information helps. Please remember that this information does not constitute legal advice and should not be relied on. Nor does it create an attorney-client relationship.

I wish you the best of luck in your situation!