Is there a way to recover an overpayment to an employee (or mulitple employees) if there was a “glitch” in the payroll system?
As an employee, would it seem resonable to return an overpayment?
Thank you! I am new to the HR field and consider this BLOG a “Daily Read!”
We want to note that your question refers to an overpayment in the state of California. This answer would be very different in most states. However, HR people semi-affectionately refer to your home state as *The Peoples Republic of California* for its myriad extremely pro-employee labor laws.
In most states if the employer makes a mistake and overpays an employee, the employer can simply deduct the overpayment from the next payroll check. This is not true in California. Basically, any payroll error the employer makes resulting in an overpayment is simply an unscheduled bonus to the employee. The employer is not allowed to make any deduction from future paychecks to recover the overpayment. So no, there is no legal way for you to compel these employees to pay back the overpayment.
The state regards such overpayments as an unintentional advance on future wages, and by statute a California employer is not allowed to deduct an advance from the payroll check.
You can certainly ask employees to return the overpayment. You can ask them to stand on their head while singing Yankee Doodle or to send valentines to the boss, too. But there is no reason why they should comply with such a request, and frankly, it is less than professional. You certainly cannot discipline an employee who refuses, or consider this factor in making future employment decisions.
In California, when an employer overpays an employee the employer absorbs the cost of the mistake. This is just part of the cost of doing business in the state.
You might be tempted to penalize the employee who made the mistake in the first place by docking her pay, but that would also be unlawful in California (and most other states.)
Thanks for the kind words! Also check out our sister site with the latest on HR news at http://blog.laborlawcenter.com.
Feel free to post as many questions as you like but please, for your sake and ours, mention that you are in California each time. It makes a huge difference!
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