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Overpaid by my company

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MNblondie

Junior Member
MN - My company overpaid me through direct deposit. Now they want it all back. They are continuing to pay me, take out taxes and take back 100% of what's left until the overage is repaid. Shouldn't they simply stop paying me until everything is caught up, rather than continuing to tax me...seems like it's double-dipping. Why should I pay additional taxes on money I am not getting??? My company is in NY and I am in MN.
 


pattytx

Senior Member
They can't legally just "not pay you". In fact, Minnesota is one of the few states that limit how much of an overpayment can be deducted from any one paycheck (or at least they used to); I think it's no more than 20%.

What do you mean you're paying "additional taxes on money I am not getting". Explain to me exactly what they're doing.
 

MNblondie

Junior Member
They are continuing to pay my salary, but are paying taxes on the money and then taking 100% of what's left...leaving me with absolutely no income. It was their mistake - granted, no one (including myself) caught it...but I would have thought they should just stop paying me until my hours caught up with my pay...as if I was pre-paid for the time (similar to a retainer.) additionally, they tried to reverse the overpayment from my checking acct...without notice to me...resulting in an overdraft and fees.
 

pattytx

Senior Member
OK, so you are being paid your salary. Then the NET amount of the overpayment is being deducted to the extent it takes the NET pay to zero?
 

MNblondie

Junior Member
Yes, that is correct. I found the following online (legal site)...do you know if this is true?

New York's wage deduction statute is an example of this highly restrictive type of law. It specifies that only deductions that benefit the employee are allowed, such as deductions to cover the employee's portion of a health insurance premium, and an employer in New York must still must obtain the employee's written authorization for those deductions. Under the New York statute, an employer who has mistakenly overpaid an employee (because of, for example, a clerical error) cannot legally make a deduction from that employee's subsequent paychecks to correct for the overpayment, even if the employee has agreed that he or she was not entitled to the payment and has signed a written authorization. The employee's signed authorization would not protect a New York employer from liability should the employee later chose to sue the employer, claiming that he or she unwillingly signed the authorization under threat of termination.
 

pattytx

Senior Member
It doesn't matter what NY law is, because you work in MN and Minnesota law applies, not New York.

Here's what should happen. When you have completely "paid off" the NET overpayment, the payroll department should reverse the wages, taxes, and any applicable other deductions (if possible--there can be exceptions) from your year-to-date wage and tax buckets. Will this repayment be completed by the end of the year? Does your pay stub show YTD amounts? If so, do they still include the wages and taxes relative to the overpayment?
 

pattytx

Senior Member
Yes, it does.

What happens if my employer overpays my wages?
The Department of Labor and Industry policy regarding overpayment of wages is that the employer has the right to recover any overpayment caused by a bookkeeping error; therefore, an employer must be reimbursed for overpayment of wages.

My employer wants to take my wages to make up for cash shortages or things I break. Can they do that?
Your employer may not deduct from your wages for breakages, cash shortages, tools or uniforms.
http://www.dli.mn.gov/LS/FaqWages.asp[/url
 
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