Can an employer make you pay back money that it overpaid you due to a payroll error?

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Can an employer make you pay back money that it overpaid you due to a payroll error?

My company has overpaid several employees including myself without us knowing. Our paychecks stated the proper hourly amount. There was no indication of overpayment. Now due this payroll error made by the company they are forcing employees to pay back the money. I saved my time sheets and past paycheck stubs as proof. Now without signing any documents or being told how much the company will take they have decided to take the money back, putting me and my family in a financial bind. Is there anything I can do about this?

Asked on September 9, 2010 under Employment Labor Law, Maryland

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

You seem to admit that it was an overpayment--i.e. that you were paid more more than you were entitled to, given your rate of pay and the ours worked. If so, then you have to repay it--you have no right to the money simply because a clerical or administrative error caused it to be sent to you, anymore than someone else would have a right to a computer you ordered paid for simply because UPS delivered it to the wrong home. The money is not yours, and you cannot keep it.

You have a right, of course, to verify that the correct amount is returned and you keep all monies do to you. You also should not pay any costs, interests, penalties, etc. since this wasn't your fault--it's simply that the money needs to be returned. Under the circumstances, it would also be reasonable to work out a payment schedule you could meet.


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