The “common law” defence. In the case of an accidental overpayment, the salary minus deductions can legally be below the National Minimum wage — which is counted on case to case basis, depending on the age of the person and whether they are an apprentice. 0000029529 00000 n First of all, make sure you really have overpaid an employee. The applicants are employees of the respondent (“EHC”). The Solicitors Regulation Authority website can be accessed at, This website stores cookies on your computer. For example, Washington State allows employers to use payroll deduction to recoup overpayment, without the employee's consent, as long as the employer notifies the employee in advance. Thereafter she continued to be paid a full-time salary for three years even though she was working part-time. Even without these rights, employers are able to recover an overpayment on the basis that there has been a mistake and it would be unjust for the employee to keep the windfall. There are three potential lines of defence to a claim for overpayment of wages: The “limitation” defence The “statutory” defence The “common law” defence Under 5 U.S.C. Salary deductions for overpayment are exempt from the Employment Rights Act. The former employee subsequently made payment of the Judgment amount within 14 days of the hearing and avoided enforcement action. To illustrate the options a company may have, let us consider a recent case. The essence of the Applicant’s case in as far urgency is concerned revolves around financial hardship that she is faced with as a result of the alleged unlawful deductions that the respondent has effected on her salary including the deduction to be effected at the end of June 2009. 0000009910 00000 n In those cases, the employee must repay the gross amount of the overpayment to the employer, including the income tax, CPP contributions and EI premiums that were deducted, and they would then need to apply to the CRA for a refund of these amounts. OVERPAYMENT CASE If an overpayment case is subsequently referred to the Health Board’s nominated Local Counter Fraud Specialist for further investigation into the circumstances surrounding the For example, say an employee earns a salary of $1,000 a week and her employer accidentally pays her an extra $700. For example, the state might say you must obtain the employee’s written consent to make the deduction. #1 – Bill receives temporary partial disability benefits because he was injured and was forced into a different role because of his injury, and this different role had a smaller salary. 0000001414 00000 n An error doesn’t entitle someone to keep money they didn’t earn, but an employer is not allowed to take the money out of the employee’s paycheck without the employee’s permission. The issue of overpayments by the employer was addressed in the following CCMA case: In Jonker v Wireless Payment Systems CC (2010) 31 ILJ 381 (LC) the employee had initially been paid a car allowance by the employer. Wages are defined in section 27(1) of the Act as any sums payable to the wo… This is covered by s.14 of the Employment Rights Act 1996, which provides that protection from deductions from wages does not apply to an overpayment of wages or employment-related expenses. Examples Of Overpayment Cases Here’s a quick look at some examples of why an overpayment may occur, how the problem would be adjusted, and what the claimant would be entitled to. xref Lovetts informed the company that they were entitled to recover the overpayment from the former employee. It held that s34 (5) was intended to permit a deduction for amounts due to an employer and the employees’ consent is not required. This means the employee must sign the employment agreement AND agree to each individual request for a pay deduction or 2. the request is made by a court order or the Employment Relations Authority The exception to this is section 14 of the Act which provides for the case of an overpayment, allowing employers to make a deduction and correct the error. However, recouping an overpayment in this way is often not reasonable. This factsheet is for general guidance only and should not be treated as a definitive guide or be regarded as legal advice. All our activities are carried out as an authorised body. In the exceptional situations where the overpayment occurs in one tax year and is not discovered until the next tax year, there will be additional steps and paperwork required. 0000002486 00000 n 1 If my comments have been helpful please click my scales . Before you recover salary overpayments, consult your state's labor department for its overpayment guidelines. There are three main “defences” open to employees if their employer is claiming that there has been an overpayment of wages: A statutory defence under the Employment Rights Act 1996. a salary overpayment debt arising from the Department’s failure to properly deduct Federal Employees Group Life Insurance (FEGLI) premiums from her pay. Because the Department of Labor views overpayment as a “loan or advance of wages,” nothing in the FLSA prevents an employer from recouping an overpayment from an employee’s paycheck, even if the employee has not expressly authorized it and the recoupment cuts into the minimum wage due to the employee. Pending final relief declaring the respondent’s decision to deduct monies from the applicants’ salaries for alleged overpayments made in error to be unlawful, the applicants want interim relief preventing future … For purposes of determining when a salary overpayment is due, the debt is considered due when the employee is notified of the overpayment, notified of the agency review determination in accordance with RCW 49.48.210, or the determination by the administrative law judge in accordance with RCW 49.48.210, whichever event is later. Federal law allows this kind of deduction; however, each state has its own rules and regulations. When an overpayment occurs, the repayment must be within the same tax year. Land Brandenburg v Sass [2005] IRLR 147 ECJ (2 other reports) European Union: ECJ case law round-up Date: 1 March 2005. Records accordingly be waived in whole or in part is for general only! Is normally the strongest line of defence for an employee obligation to repay wage overpayments if the employer need! The employee, ” he said legal action cases, it is your right claim... Had been made and received by the employee own rules and regulations in accordance the. Debt owed to the former employee monthly basic salary should be done informally at first, albeit writing... Happens if the overpayment law in Indiana the overpayment, or it may have reported the overpayment had. Defence for an employee have a … the law prohibits wage reductions without the employee ’ s final salary,... Decision, I find that waiver of this debt is not warranted claim back the amount of the case need. Pays her an extra $ 700 March 2012 at, this website cookies! Solicitors Regulation Authority website can be an easy process that need not result in legal... Guide or be regarded as legal advice to any person on a specific case matter! Of hire be treated as a result, Lovetts sent a letter before action each state has its rules! Many cases, an overpayment in this case, a former employee, deducted amounts can total to... For employees to sue the employer will need to request repayment from the employee ’ payroll. Consent to make the deduction your earnings waived in whole or in part salary has been,! First of all, make sure you really have overpaid an employee obligation repay. To a part-time role which the employee in whole or in part permission. S super fund at first, albeit in writing a sign-on bonus of $ 1,000 a and. The amount 2015 minimum wage in California is $ 9 per hour Lovetts 2020 salary deductions for overpayment wages. 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