Payrate error

dwitt

We recently discovered a payrate error - An employee was receiving .50 shift premium instead of a .30 shift premium.

Our hourly rates are set up in payroll with a base rate, then a Rate 2 which includes the shift premium.

Of course this employee is angry that his hourly rate of pay will be corrected. He has benefited from this error since 8/27/07.

As the employer errored in this instance, are we obligated to keep him at that rate? Can we correct his rate without any ramifications?

Any input would be greatly appreciated.

sonny

I do not believe you have any obligation to keep the rate.
He should be grateful for the error.
I believe you could actually collect the overpayment back.

ritaanz

You are under no obligation to continue to pay this employee the additonal $.20 shift premium. You can also arrange to have them reimburse the company for the overpayment.

You could ask this employee why he did bring this matter to his supervisor's attention. This question usually quiets them down.

sonny

He didn't KNOW Rita. . . ya know how they ALWAYS catch when you short them and seldom the other!

ritaanz

Oooops. Imagine that.

davids

I agree with others - you can correct the pay rate and require the employee to reimburse the overpayment. As a public employer, we do not have the choice of forgiving the over payment, so what we have done in these types of situations, when the overpayment is more than minimal, is allow the employee to repay us by payroll deduction spread out over several pay periods.

FunHRBanker

Heck no, you don't have to keep him at that rate! He knew something was amiss and didn't report it. We do the same as others and correct the error over the next few checks. I'm unclear as to if you need a separate authorization for the deduction, but I would definitely try to get one.

Wildsporty

You can correct his rate. I would be inclined since it was payroll's error to forgive the overpayment and go on from here with the new rate.

The reasoning would be that it would be more work that it was worth to calculate the overpayment and set up the pay schedule, get the authorization for the deduction and take out the deduction each time remembering when to stop taking it out.

Just would be easier and cleaner to start now with the new wage. Might appease the employee a little too.

You know they never look at their check stubs. I went to give an employee his once because he had been on vacation, he opened his desk drawer to put it in there and he had the whole year's worth of unopened direct deposit advices in his drawer.

Shirley