Over payment and direct deposit

[AER]

If a former employer deposits an "unearned" paycheck into a bank account, is the employee legally required to return the money? Additional circumstances: The employee was not notified of this error until 4 months had passed. The employee never received a paystub (although one has since been faxed). Not knowing these funds were deposited, the employee (who moved out of the area to take a new job) closed the bank account and authorized the bank to transfer remaining funds to an outstanding car loan (and no longer has access to the these "rogue" funds). The request for repayment would create a financial hardship at this point in time for the employee. The institution admits responsibility for the error.

 

[lawrat]

I am a law school graduate. What I offer is mere information, not to be construed as forming an attorney client relationship.

Then in that situation, institution was the one who erred. If employee truly and reasonably did not know of the error, this is what is called a unilateral mistake. Essentially, mistaken entity (institution) must eat the cost. Kind of like painter paints wrong house. He cannot force the wrong house to pay for it.