Double Payment / Take Back?

We have a situation in which an employee submitted a form to stop direct deposit (two pay periods ago). The form was submitted to corporate who had already processed payroll, but had not submitted the transmission for direct deposit. Payroll removed the item from direct deposit and cut a manual check. Problem solved, right? pay period rolls around and payroll was processed. Once again this employee was setup for direct deposit, because it was never entered out in the field that the direct deposit should cease (NOTE: Form was only sent to corporate for documentation purposes). The direct deposit went through.

The reason the employee stated they wanted direct deposit stopped was because the account was closed. However, in actuality, there was a negative balance on the bank account and the employee appears to have been trying to outrun the bank.

To complicate matters, payroll also cut a manual check thinking it was their fault for not ensuring that Direct Deposit was stopped. SO, in essence, the employee was paid twice. Our CFO says that we need to get one of those checks back because they can't be paid twice (especially if they had deductions for health or 401k). Unfortunately, the bank says there is not enough in the account to reverse the direct deposit. SO, the CFO was recommending that on the payroll currently being processed, today, that the employee be given a ZERO check (and think of the double payment as an advance).

Does anyone know if this can be done OR do you have any other suggestions? Please advise. Thanks


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