We have an interesting situation that I need some guidance on.

We have an employee with an account here that is overdrawn because of a purchase from pay pal that was returned due to NSF. There have been a few more items returned NSF and fees charged because of the initial item.

Employee has not filed Reg E Dispute paperwork on the initial item.

Bank policy states that employees must bring any OD balance current within the next pay period.

We are looking at disciplinary action against the employee for violation of the policy on NSF. Would there be any issues with this?

Thank you.

My opinion would be to wait until after the dispute period for Reg E. However, my question is, has the employee been asked about the item and whether or not it is an item to dispute?

Yes, employee has been asked about the item and is claiming that it was not authorized.

OK. Did the employee indicate (s)he has filed a non-authorized transaction claim with PayPal?

No issue with disciplinary action in response to a policy violation. But I would suggest that you confirm that a policy violation did indeed happen. The wording that you shared here makes me wonder if the OD should be rectified before the employee's next pay, or with the employee's next pay, or in the pay period that follows the employee's next pay.

Whatever it says, make sure it is clear to the people who need to read it, understand it, and abide by it before enforcing it.

I guess I don't understand what this means. They purchased something using PayPal?? They thought they had sold something using PayPal??

I suppose it would be based off of what your policy states are actions the bank will take for employees in this position. so my first call would be to HR, and if they don't know, then to the bank's legal counsel - either internal or external.