Still getting paid by old company?

Question

I was a salaried employee at a corporation. I resigned from that job several weeks ago, but -- through management or payroll error -- I haven't been taken off the books as I'm still receiving paychecks and still have my old insurance. I know I'll likely have to return the money direct deposited into my bank account, but I'd love to stay on their insurance for a little while longer until the insurance through my new job kicks in. Legally, can I get in any trouble by not reporting this accounting snafu immediately?

Answer 1

No, if they pay you it's yours.

Answer 2

Absolutely. Once the error is discovered they may very well take the money out of your checking account. I would ask that they fix this immediately so that they don't do this. You will have to pay all of the money back. Your insurance may still be in effect, you need to check with their human resouces department because coverage my last 30 days or so.

Answer 3

More importantly, ask yourself what would happen if you stayed on their insurance but then filed a big claim. They have an incentive to help the insurance provider keep costs as low as possible so they would absolutely fight your receiving coverage.

Remember that you're probably eligible for COBRA which can often be purchased retroactively, that is after a loss.

Answer 4

You are already aware that you're not legally entitled to benefit from the company error of paychecks they send to you that is money not earned. The same principle applies to the medical benefits. It's not free for the company to pay for the benefits. So if you avail yourself to the medical benefits, knowing that you don't qualify and you are no longer incurring deductions from you salary (which still shows on the current pay disbursements for your salary), you're committing theft. They may decide to treat it as theft, or they may eventually sue you civilly to only collect the mis-directed pay, but interest on top of that. And interest is calculated much higher than you might expect. On criminal restitution matters, it's 10% from the date of loss. So think carefully about what you want to do on this one. You're not allowed to claim ingnorance or take a position of 'well it was their mistake so I'm free of culpability'.

Answer 5

Be careful, we studied this in my business ethics class.

I don't they can make any legal claims if you play dumb, but remember that if you ever try and go back and work for them, you've burnt a bridge. Your use of the company as a reference is put in jeopardy as well.

Examine the situation and potential repercussions carefully before taking a step that can't be taken back.

Character lasts longer than gold.

Answer 6

They will eventually discover. It's their mistake and all they can do is to either reverse the deposit (they can do that) or ask you to pay back. However, I don't think they can cancel the insurance retroactively. You will not get into trouble as long as you don't fight when they discover.

Answer 7

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Answer 8

Trust me, they can reverse the money from your checking account. And they will do it all at once.

Answer 9

Probably not but you will be asked to return the money.

Answer 10

Just wait it out and see what happens!

Answer 11

I do believe that if you knowingly take advantage of this it would be fraud.