Overpayment of Wages

We recently discovered that an employee who received a temporary salary adjustment in 2000 to go on an assignment, never got the adjustment taken off his record, so received an overpayment of wages of about $25,000 during the past three years. I would think there are laws that cover this in CA, but I can only find a DLSE opinion letter from 1999 that kind of covers it. It just says we can't deduct for it, that we would have to consider it a debt, which I understand. However, are there any restrictions on how far back we could go in considering the debt and requesting repayment? Should we try to recover the entire amount, only go back one year? This is a long term employee, probably close to retirement. It is the company's fault, but he probably should have realized the adjustment was never taken off.

Hoping Hatchetman will weigh in on this one!



  • 5 Comments sorted by Votes Date Added
  • What makes this difficult is that the employee is "probably close to retirement" .I can't imagine that this employee would put his/her retirement on hold for the many years needed to pay the company back. Even if you give the employee the choice of paying it back or being terminated , most likely the employee would just quit. With an amount of $25,000, this case doesn't qualify for Small Claims court. Sorry, the company is just going to have to eat this one as it made the mistake.

  • Chari's response may describe the ultimate outcome but there is no point in not trying. It is a debt and you have the right to try and collect like anyone else who is owed a debt. Even though it was your mistake it doesn't look good that someone should just collect the overpayment without saying anything for all that time.
  • How long was the temporary adjustment for? I only ask because if it was for a long time, and he moved to a different assignment theoretically one could forget.
    I would look to recover the last year, going back further though you may be able to legally will look pretty heartless. I know he should have said something. But also you (the company) should have caught it too.
    Just my $0.02 worth.
    DJ THe Balloonman
  • It may be that the company cannot figure out what the man owes precisely. If he's gotten one or more raises in the last three years it was no doubt compounded on his current rate, over and over for three years. It would take a magician of a controller to figure this one out. I tend to want to find out who did not catch this when it should have ended, rather than think "The employee should have said something". I think you'd spend that much in attorney fees and expert testimony from a mathmetician in a courtroom.
  • The temporary adjustment did not change his base salary at the time, it was an additional monthly payment (but it was not listed as a separate line item on his pay stubs), so it did not effect increases. It won't be difficult to figure out the exact amount.

    It looks like the approval for his adjustment back in 2000 was done as an exception, so it didn't go through the regular process, which is probably why it wasn't reversed when it should have been.

    My recommendation will be to go back maybe one year because he'll have to revise his tax return for 2003 or file an amended return if he's already filed and I would hate for him to have to go back and amend two more years. We are waiting to hear back from our legal department on their recommendation. Thanks for your imput.
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