Overpayment Payback?

[windar]

Hi,

Washington State.

Can an employer legally ask employees to repay payroll overpayments due to administrative error? If so, do they have a right to repayment of company contributions?

Thanks

 

[justathought]

Are you asking if you can keep company money which you didn't earn or are not entitled to?

 

[cbg]

Yes, they most certainly can ask for repayments of overages. With regards to company contributions, I'm not sure what you're asking.

 

[windar]

As for collecting the overpayments, I was wondering about the company contributions paid on such overpayment, e.g. Social Security and Medicare company contributions.

I guess it's more of an accouting question. Whether to collect the entire overpayment before deductions or net pay plus company contributions.

To answer justathought: there was an overpayment of 9 hours of overtime that was not discovered until after employment terminated. Comapny's data entry error.

Hope this makes sense.

 

[justathought]

Apology offered... I jumped right to the ethical instead of the accounting. I work in a payroll office and you'd be surprised how many people don't want to pay back errors. (Although they are the first to come crying when their check is five bucks smaller than normal because of something like taxes!)

I can't answer specifically for your state or even your office, but where I work we would only ask you for the *net* overpayment. (Meaning, we would take the gross, add applicable taxable benefits, subtract taxes and taxable deductions... I don't have the "formula" in front of me, but that's the gist of it.) All appropriate employer/employee contributions are adjusted to reflect the accurate final payment.

It gets even easier if the employee hasn't cashed the check yet, because then we just reverse the check, which reverses all of the contributions, deductions, etc. Then a new accurate check is issued with the accurate deductions and contributions.

But it depends on how your payroll system/office/state works.

I hope this makes sense... and hope it helps.

 

[Kimmers_75]

I have a very similar question. I recieved a check for my severence payout in December. I then today recieved another check for the same amount. Ethics aside from the response, I am depositing the second check tomorrow and keeping it liquid in the case of having to pay it back. What I would like to know is--if my check is void after 180 days, is there a statute somewhere stating the time that the company has to retrieve this money? Or can they come to me 12 months from now if they realize their accounting mistake then? And to be totally honest, I worked for a huge company and have read the severence plan payout information which has me a little confused. I'm not totally sure that this money is not payable to me. That is why I will keep it liquid for quite some time.

I guess I just want to know if there is a time limit for a company to retrive their fund legally.

Thanks,

Kim

 

[cbg]

No, they can come back for it whenever they discover the mistake. Since you are not sure if this is really an overpayment or not, you should call them and ask. This will also cover you with regards to a payback - if you think you've been overpaid and do nothing, they can call it stealing.