Is a terminated employee responsible for repaying a wage overpayment?

UPDATED: Oct 1, 2022

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Is a terminated employee responsible for repaying a wage overpayment?

My former company overpaid on my final paycheck 3 months ago. Do I still need to repay?

Asked on September 3, 2017 under Employment Labor Law, New York


M.D., Member, California and New York Bar / FreeAdvice Contributing Attorney

Answered 5 years ago | Contributor

You will need to refund this money. Think about it, had your former employer had underpaid you on your final paycheck, then you would have the legal right to collect the shortage. If you keep money that you did not earn, in the eyses of the law this would constitute what is known as "unjust enrichment". Court disfavor this, so if you don't voluntaruly agree to repay this accidental overpayment, your ex-employer can sue. Further, as a practical matter, you will never be able to use them as a reference regarding future employment.

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