over-payment at end of employment

jenlee · August 2003

[font size="1" color="#FF0000"]LAST EDITED ON 08-29-03 AT 00:00AM (CST)[/font][p][font size="1" color="#FF0000"]LAST EDITED ON 08-28-03 AT 11:58 PM (CST)[/font]

It was just brought to my attention today that we have continued to pay (thru direct deposit) an employee who resigned (with 2 weeks notice) and stopped working 4 weeks ago. Trying to resolve the issue without fessing up to her mistake, my payroll manager called the former employee and left a message that she had made a "clerical error" and would like her to send the money back. What legal ramifications do we have if the employee does not cooperate? Does the fact that the payroll manager left her a message admitting the error affect any possible chance we have of recouping the money? We are talking less than $5000 so would it even be worth it to file legal action if that is possible?

Balloonman · August 2003

I had this happen to me when I left an employer once. Only thing I notified them of the mistake, and was told I was wrong. I was changing banks so I left the money there. A few weeks later they realized their mistake and just reversed the direct deposit. You can probably do that for the last paycheck, but the first one they will have to send back.
A decent person will just send it back. A smart person will once they get a letter from an attorney. :-)
My $0.02 worth,
DJ The Balloonman

LindaS · September 2003

Regardless of where the error occurred, the fact that the ex-employee received pay for which she was not entitled remains the same. If the former employee refuses to cooperate, you need to decide whether or not to file legal action against this person. I think that any amount over $100.00 is worth seeking restitution on. The ex-employee knew that she shouldn't be receiving the funds yet failed to contact you regarding the problem. Try to work it out with her (possible set up a payment plan) and if she fails to cooperate, the legal route is the only way to go.

HR rosie · September 2003

I recently had a similar situation. A General Manager said he faxed the termination paperwork to payroll. The payroll manager said she never received the fax. Consequently, a former employee was paid for a full month that he did not work. When the original termination paperwork reached the payroll manager and she realized what had happened, she came to me because she didn't know if we could collect the money. I called the former EE, explained that we had discovered the error during an audit and he owed us the money. He admitted that he had cashed the paycheck (which I already knew) and agreed to reimburse us. I followed up our conversation, in writing, via certified mail. The money was repaid promptly. If this doesn't work for you, have your attorney send a letter - the bill you pay your attorney for writing a simple letter is well worth it - why should your company have to take a hit because the payroll manager made a mistake? Bottom line, the former EE knows the money isn't due to them. Sounds like you are better off without this person as an employee!

Rockie · September 2003

An honorable person would most certainly contact you and say "hey, you guys are still paying me - what do I need to do?" We all know how rare "honor" is these days Most ex-employees, particularly if they left under less than desirable circumstances will leave skid marks to the bank to either cash the check or spend it as fast as possible in the case of a direct deposit. They are of the mind set "You made a mistake - so it's mine to keep!" Usually, sending a letter from an attorney to pay up or else, is sufficient. Usually this will elicit a tearful phone call from the ex employee stating that they have already spent the money and don't have it to send back. At that point, if you do, indeed, want to get the money back, you really have no choice but to set up a payment plan and hope they stick to it.

Pork · September 2003

Certainly, the first thing to do is contact the x-ee. In writing provide the individual with and out for repayment which allows for a reasonal time for repayment. Below your signature write: Copy Furnished: Mr. John T. Smith,Esquire, Attorney at Law ( the name of your corporate attorney). I have found that most people will respond appropriately if they know you are serious. What I like about this letter is I really don't have to pay an "Attorney Dawg" to get after the "right thing to do", I can also sniff out the boderline criminal!

PORK

marc · September 2003

We have had success reversing the autodeposit, although it takes some time. Also depends on the money still being there. If it has been reduced by bank fees, bounced check fees, etc. you may not get it back.

The face-to-face or phone call with the employee would be first. I also liked Porks suggestion, which I will copy and hold for future need.

over-payment at end of employment

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