If an employer over pays you, do you have to pay it back?
Get Legal Help Today
Compare Quotes From Top Companies and Save
Secured with SHA-256 Encryption
If an employer over pays you, do you have to pay it back?
The company I work for made an error in they’re payroll when I switched from part-time to full-time. Since my pay was about the same I didn’t catch their error. They now are trying to say that I have to pay them over a$1,000 a month so it doesn’t affect their fiscal year. Can they dictate the terms of re-payment? Additionally what about the taxes that I had to pay and the fact that it threw me into a higher tax bracket so that I received less on my taxes? And what about the inflated insurance charges? This was their error but they refuse to take any of the liability.
Asked on May 3, 2011 under Employment Labor Law, Texas
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 12 years ago | Contributor
1) Even if they made an error, you have to repay the money. Making a mistake does not give you a right to the extra money any more than if they had made a mistake and underpaid you, that they could in that case refuse to pay you the full amount due. If you were paid more than you should have been, it must be repaid.
2) As you point out, however, overpayment affects taxes, insurance, 401 contributions, etc.--mostly to your detriment, but possibly in some cases to your benefit (e.g. a larger 401 match). All these other payments and consequences need to be taken into account in calculating what you need to repay, what your tax liability is, etc. You may wish to retain your own accountant to help you figure this out; since the mistake was the company's maybe you can get them to pay for some or all of the accountant's cost.
IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.