Federal Law on Bouncing Paychecks


Federal laws dictate that employees are paid correctly and in a timely fashion. There are also legal options, including labor code provisions for bounced checks, available to an employee whose paycheck bounces. Taking advantage of these laws can help ensure you are compensated appropriately for any paycheck your employer bounces.

Options for Bounced Paychecks

You have two ways you can handle a bounced paycheck. You can report the check as you would any bad check (to the local prosecuting attorney under section 1719 of the civil code), or you can pursue the bounced check under the provisions laid out in the Labor Code, which may vary on state levels.

Civil Code 1719

Section 1719 of the the civil code allows you to recover the amount of the bounced paycheck and up to $1,500 in penalties. The code does not require the employer to pay any bank fees associated with the bounced check, including fees for checks you may have bounced as a result of the bounced paycheck. The choice to pursue this route, which may be faster, is yours. The downside is that the limit of $1,500 is typically less than what you may recover with the labor code.

Labor Code for Bounced Checks

If possible, pursue a bounced paycheck through the labor code, even if you are still employed with the company that bounces your check. With the labor code bounced check policy, you are able to recover the amount of the bounced check, plus you can recover your salary as a penalty until such time the bounced check is clear (up to 30 days). You are required to try and deposit the bounced check within 30 days of receiving it. The labor code for bounced checks does not allow you to recover any bank fees associated with the bounced paycheck.

Reporting Regular Bounced Checks

If you are an employee who regularly receives bounced checks from your employer, you have the right to report the bounced checks to the Division of Labor Standards for your state. You can do this anonymously by filling out a form on the Division of Labor Standards website for your state or by visiting the Bureau of Labor.

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