Employee was over paid... he brought the error to the employer's attention, now employer is demanding repay

Question

Employer demands repayments in two large payments which is a month's worth of disability payments (the employee is on disability) or the other option is that the employee pay with almost a month's worth paychecks upon his return to work... Both repayment plans will place dire financial distress on employee.... can this be done? It was an employer mistake....

Answer 1

The laws vary from state to state but you can bet the employer has legal representation behind them. The employee should as well. Most states have legal aid that offer free or low cost advice for cases like this.
Additionally, the employee should counter the employer's repayment demands with a repayment schedule that is more suitable to his/her needs. The legal aid will help you draft an effective letter.

Use search terms such as Legal Aid and your state of residence.

Answer 2

The employer is within its right to demand repayment of funds that should not have been paid out, much as a bank will deduct monies from your account without warning if it determines that those funds were deposited in error.

That being said, most companies (especially when they are at fault) will work with the employee to establish a repayment plan that works for both parties - perhaps a regular payroll deduction for three - six months until the balance is paid off. You might want to suggest this approach and indicate that you would be willing to sign documentation to put such an agreement into effect.

Good luck.

Answer 3

In the first place the employee shouldn't have brought the error to his boss' attention after he'd spent the money. Then he wouldn't be in this predicament. However, since both parties seem willing work something out, isn't it possible to suggest smaller payments over a longer period of time? After all the employer is responsible for the error, and the employee did come forward about the error. This being said, both parties should try to work out a more reasonable re-payment plan.

Answer 4

It is admirable that the employee noticed the mistake and brought it forward to the employer, but it does not give them the right to keep the money. The employee would not have financial distress if she/he didn't spend money that did not belong to them in the first place. A good rule of thumb is to repay the money over the same period of time that the error occurred (i.e. 3 months of over-payment = 3 months to repay).

Answer 5

So let me get this straight....Employee was over paid and knew it....employee was like "yeah free money" then proceeded to spend the money. Then realized what he did was wrong so he confessed. Since said employee had already spent the money, he no longer has it.

Have i got this all so far?

Good news for you though...No you dont have to pay him back how he demands it. You can make payments that are comfortable for you.
Bad news for you. He can charge you interest and he can charge alot of interest. (I think up to 12%) Best case scenario for the employer is that he can take you to court, get a judgement and garnish 25% of your wages. (he cant take disability payments though if i remember right.)

Tell him you will pay him back over 4 months which is the best any court would give him. And considering you are on disability theres a good chance a court would only make you pay over 1 year. (dont push for the court thing though because he'll get tons of court fees (like 400 dollars or more) that he will make you pay and someone by that time might tell him he can get interest on top of that)

Answer 6

The employee has no legal right to keep the money. If the employee spent money that didn't belong to him or her, that's his/her problem.

However, one thing you should look into is if the employer's mistake was obvious to the employee. For example, if the employee usually gets $2,000 each week, but his paycheck said $20,000 - then he should have clearly known their was an error. If it's a small amount, he the employee might not recognize it - but if that's the case - then it should be very easy to repay.

Answer 7

look, we are in a position to do away with unions the very day all of us paintings for small companies that each and every compete with various dozen different companies (20 workers or much less). yet, see you later as there are clunking "huge employer" monopoly dinosaurs (no remember if it is BA, Tesco, Proctor and Gamble, WalMart, Barclays, the rail companies, and so on.) then we will choose the union T. Rexes to handle the fallout. And lest we overlook, back in the "stable old days" - confident, there replaced into much less union means, yet FTSE100 organisation chief executives earned a salary that replaced right into a undeniable distinctive of their lowest paid workers' salaries and not extra. (So none of this bullsh*t the place huge d*cks get one million pound salary to run a organisation the place some workers are paid minimum salary!) in case you prefer to return to at present i could be extra suitable than chuffed to sign the petition.

Answer 8

Work with the employer for better terms, really you shouldn't have spent the money when you realized the error.