Overpaid employee

We have an ee (exempt)who was pregnant last year. After the baby was born, she went PT. We just found out that Finance did not adjust her salary to reflect the PT hours. Since the baby was born, she has still been getting paid for 40 hours when she should have been paid for 30 hours, her new PT hours. She was overpaid by $6,000. She questioned her salary to our Accounting person because it was very close to her FT salary. The accounting person, who was fired last year for numerous mistakes, told her it was correct because the salary reflected a recent annual raise and because she had received her master's degree. The ee does not feel she should repay us since it was our fault. Can we legally ask her to repay? We can set her up on a payment plan.

Comments

  • 17 Comments sorted by Votes Date Added
  • Shadowfax, I'm just curious as to the position you took. Can you offer an explanation supporting your position?

    My knee jerk reaction would have been a negative on going back for overpayment of wages, if in fact that is the case given that the employee was told the salary remained the same for the PT work due to wage increase. Going forward, if the company now wanted to reclassify the position, do an analysis of what the position was worth on a PT basis, and adjusted salary accordingly, I would think the employee could then either accept the reclassification or seek employment elsewhere.


  • [font size="1" color="#FF0000"]LAST EDITED ON 09-21-05 AT 09:49AM (CST)[/font][br][br]An exempt person must receive her full salary for any week in which she performs work without regard to the number of hours or days worked. Once set, the salary is what it is, unless it's adjusted; which it wasn't.That said, the DOL will allow you to adjust a person's income on the next pay period if you made a mistake or somehow under or over paid an employee. So I would say the employee is correct. You can ask her to repay, but I don't think I would even do that. By law she was entitled to the money.
  • Sorry. I totally blew by the fact she was exempt. I stand corrected.
  • I think you have a case for going after the overpayment, but it depends on whether or not there was any understanding with respect to decreasing the salary when she reduced the scope of her job. I assume (hate that) that her job responsibilities were reduced along with her reduced availability and that she knew the adjustment was coming.

    If there was a conversation between ER and EE and then ER just made a mistake - there is plenty of precedent for recovering the dollars. The EE is being unjustly enriched for the ERs mistake.

    That said, you might have to go to court to get a judgement and then try to collect. Unless you are in small claims courts, add the attorneys fees to the whole mess.

    Perhaps you can negotiate a reasonable settlement and take it out of future wages and/or raises, if any.
  • I agree with the gentleman from Minnesota. The payroll department has no business adjusting the pay of an exempt employee, unless they've got way more authority than they ought to have. The salary is the salary that was quoted upon hire or whatever it became after raises, etc. Salaried employees are not paid for forty hours or 30 hours. They are paid, according to law, "For the hours worked, whether few or many".

    If an adjustment was intended and discussed, some sort of personnel actions form, or at least a memo, should have been cut by the supervisor instructing payroll to adjust the pay.

    Did I say 'gentleman' from Minnesota?
  • The salary that she had been getting was based on 40 hours per week. How can employee expect they will receive the same salary for working less hours. If that is the case, I need to go tell my boss now that I want to work 30 hours and still get paid my FT salary. I understand the exempt rules, but it would make no sense for an ee to still think they could get their same FT salary. Everyone would want to do that. The ee was told her salary would be adjusted based on the number of hours she is now working. It was our mistake that it was not done. The Question I still need to know is can we legally force her on a payment plan to repay the money?
  • If she does not agree to a payment plan, your only legal "forcing" would come through the courts in the form of a judgement.
  • Sorry, I think the whole thing stinks. Your office workers/supervisor made a HUGE mistake. When they let her go from 40 hours to 30 hours THAT was the time to sit her down and give her the reduction in salary so that she and the accounting department would know what her new "salary" was.

    She questioned whether the salary paid was correct, was told it was correct, therefore I believe the company should eat the loss. They should immediately set her down and tell her what her new salary will be and begin from there. They should also discipline supervisor for not fulfilling one of his responsibilities.

    My daughter-in-law had the same problem (only she was not exempt). Told Store Manager she didn't want Assistant Manager position and wanted to go back to Cashier. You would have thought the Store Manager would know that a Cashier makes less than an Assistant Manager. #-o Store Manager never changed pay rate, daughter-in-law mentioned pay rate at least 3 times to 3 different people, now 6 months later is being penalized because Store Manager did NOT do their job.

    Whole situation makes me sick.

    Sorry.....from the employee's perspective, they questioned the pay rate to the appropriate people and now because that person did not investigate the employee is being penalized. Not just $100 but THOUSANDS of dollars.
  • GLC, your original post indicated that she did, indeed, question her salary and was told that it was legit. You have every right to correct her salary now, but I would do it on the basis of less job functions rather than less hours. If you get too exact about paying your exempts per hours worked, they may lose their exempt status.

    Your only legal recourse would be to fire her, label her as a debtor and then take her to court to collect. Going on what you have told us here so far, GLC, I don't think you would win.

    Sincerely,

    The "Gentleman" from Minnesota. (Wow! I've never been called that before, which is probably no shock to y'all. Thanks anyway, Don. You made my day. Now I will be informing my wife of how I must be addressed upon entering the household from now on.)
  • >The salary that she had been getting was based
    >on 40 hours per week. How can employee expect
    >they will receive the same salary for working
    >less hours.

    And what salary does she receive if she works over 40 hours?

  • As has been so eloquently stated by the Ladies and Gentlemen in the previous posts, you are not dealing with FT vs PT "hours" but with a salaried position. If you start to dictate how many hours this EE should be paid for, you are opening up a can of worms you don't want crawling around and you could possible be looking at a whole lot more than the 6k you spoke of.

    Negotiate a new salary going forward and let it go!
  • Probably correct that you should focus not on the hours but FT vs. PT. WOrst case make a salary adjustment, NOW. If you looked at it as working 75% of the time as oppossed to 100% and that was how the salary was going to be adjusted then draft up a repayment agreement with a couple of options, like $50.00 a paycheck until repaid. Just include wording that acknowledges the debt and says she is liable for it even if her employment terminates.

    My $0.02 worth........
    The Balloonman
  • It was Company mistake by the accounting person who was fired. The employee tried to rectify the problem but was told she was receiving the correct amount of money. In my opinion, leave the employee alone. If you apply the muscle, you may create a resignation or, at least, cause bad blood between the employer and the employee. You could rehire the accountant then fire them again for making the mistake. Since my humor is sometimes too subtle, that's a joke.
  • Hey, Gillian, I got your joke. My humor falls on the sick side most of the time, but I do recognize "subtle" when I see it. Good one.
  • I must have waked/woken, got up in a dream, finding that the gentleman from California is being humorous. I like that.

    The question was asked (loosely quoting), "How could somebody think they would make the same money for 30 vs 40 hours per week?" The answer is that the FLSA tells them to think that because it is regulation, unless a change of pay is negotiated/mandated by one party or the other or both.

    If my employer tells me they expect me to start leaving on Fridays from now on at 3:30 in the afternoon, I will not assume that my pay is being cut. I will assume my pay is the same. On the other hand, I would resent them making me work that extra 30 minutes on Friday afternoons. x:-)
  • Sorry for responding so late. First of all I cringe when you say PT exempt. According to labor law there is no such thing. That opens up your company to a whole other can of worms.

    As to the question of should you have the employee pay back. The company made the mistake. It seems like the employee expected her salary to be reduced because she questioned it. She was told that it was correct so she went on about her business. I would have done the same thing in her shoes. I think the company should just eat it and re negotiate her new salary in writing.
Sign In or Register to comment.