Payroll made a mistake and want me to pay for it?!!!

[That 510 Guy]

What is the name of your state? California

Last pay period I noticed and extra deposit made by my employer so I went online to check the paystubs. The second paystub said “Bonus” under the “type of hours” column so I thought sweet! They actually used to give us monthly bonuses but that stopped almost a year ago so I thought they might have brought that back. Exactly a week later payroll sends an email saying they made a mistake and was going to deduct the full amount from my next paycheck. Now I’m going to have to really tighten my budget to make up for the Bonus amount since I already spent it. So I emailed payroll back and said I just wanted to make sure that they aren’t going to deduct the gross amount which includes all the deductions. That would mean they are taking almost double the dollar amount I actually received through this mistake. I looked up California Labor code and found that an employer is required written consent to take anything from my check and need to come to an agreement as far as paying back the overpaid amount. So I told payroll that I do not consent to them taking the gross amount and only agree to them taking the Net amount. Recovering the withheld amount is their responsibility which just means kind of a headache for them I would imagine. So the head of payroll replies and tells me “we don’t need your consent or for you to agree on anything. We are not asking but telling you that we will be deducting the Gross amount from your next paycheck. You were given that bonus by mistake and your giving it back!” I thought wow I’m not trying to keep the money but why would I have to pay for all the deductions that went to a bunch of different places? I didn’t get to see any of that money now I have to come out of pocket because they are incompetent? This puts me in a financial situation and they aren’t willing to work with me. Is this legal? Isn’t this considered “self help” and illegal in California??

 

[adjusterjack]

There's nothing you can do to stop it from happening unless you want to hire a lawyer to address this with your employer (big boss, not HR or payroll).

Or you can wait until it happens and then sue your employer in small claims court.

Either one of those choices are likely to cost you your job and not change anything.

The deductions for taxes and social security will eventually even out when you do your taxes.

Frankly, you should have asked payroll about the "found" money before you spent it.

 

[PayrollHRGuy]

California Labor Code §221, which stipulates that it is unlawful for an employer to collect or receive any part of wages already paid to an employee. However, the law does allow for an employee to voluntarily agree to repayment of any overpaid wages as long as the employee's wages are not reduced below the minimum wage.

Keep in mind though, they can terminate you should you refuse to pay back the way they want you to pay it back.

That said there is no reason they should deduct the gross amount. Any payroll system worth the name should be able to do a negative check that creates negative tax withholding as well.

 

[justalayman]

California Labor Code §221, which stipulates that it is unlawful for an employer to collect or receive any part of wages already paid to an employee. However, the law does allow for an employee to voluntarily agree to repayment of any overpaid wages as long as the employee's wages are not reduced below the minimum wage.

Keep in mind though, they can terminate you should you refuse to pay back the way they want you to pay it back.

That said there is no reason they should deduct the gross amount. Any payroll system worth the name should be able to do a negative check that creates negative tax withholding as well.

Based on thst, the op couldn’t legally refund the money either. “It is unlawful...to recieve...”


I don’t think that section of law means what you think it does.

 

[PayrollHRGuy]

Right JAL, I pulled the trigger on that post a little to quickly.

This explains it in more detail. https://www.dir.ca.gov/dlse/opinions/1999-09-22-1.pdf

 

[HRZ]

ITs been settled case law in CA for decades that employer cannot unilaterally claw back a wage overpayment. See California State Employee’s Association v. State of California (1988), the employer conducted an audit that concluded that they had made numerous erroneous overpayments to hundreds of employees. The employer did not have the employee’s signed authorizations to make the deductions. The court held that the employer could not make deductions from pay for prior “erroneous salary advances.”

PAyrollHRGuy also references the same case .


This may be a poor long term fight to pick ...even if you are 100% right as to issues . That doesn't mean the dunce cap doesn't deserve a special head.

I might however send the author of that email and the next two levels up his or her chain of command an exact copy of the case law with ZERO other comments .

Willful failure to properly pay employees in Ca invites a new round of dunce cap awards ..especially if the deduction drops one below any relevant CA minimum wage .

 

[That 510 Guy]

ITs been settled case law in CA for decades that employer cannot unilaterally claw back a wage overpayment. See California State Employee’s Association v. State of California (1988), the employer conducted an audit that concluded that they had made numerous erroneous overpayments to hundreds of employees. The employer did not have the employee’s signed authorizations to make the deductions. The court held that the employer could not make deductions from pay for prior “erroneous salary advances.”

PAyrollHRGuy also references the same case .


This may be a poor long term fight to pick ...even if you are 100% right as to issues . That doesn't mean the dunce cap doesn't deserve a special head.

I might however send the author of that email and the next two levels up his or her chain of command an exact copy of the case law with ZERO other comments .

Willful failure to properly pay employees in Ca invites a new round of dunce cap awards ..especially if the deduction drops one below any relevant CA minimum wage .

Thanks everyone for all the information. I'm just going to have to deal with the inconvenience. I have coordinated the start up of new locations, implemented new policies, and put in so much of my own time for this company that I feel like they should be able to work with me a little and not be complete jerks about it. In fact Im flying across the country to train a new team who will be running a new location this coming week. Although not the best timing in the world for me I told my boss I would. like i always do. This is not a fight worth fighting. I think it is about that time to find a new job and leave the company..... On my own terms..... Thanks again.