Author Topic: Question about employer overpayment.  (Read 2538 times)

startingsmall

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Question about employer overpayment.
« on: December 15, 2016, 07:13:06 AM »
This is kind of embarrassing.

Several months ago (August 1st), I requested a reduction in work hours and agreed to a corresponding pay cut. My direct supervisor supposedly handled all of the papework. I reduced my work hours, but apparently the official change was never actually processed.

The embarrassing part is that I didn't even notice. We're paid via direct deposit and can only access paystubs by logging in to a program on a work computer (which I never have/make time to do), so I never check my paystubs. My paycheck deposits went down by a few hundred dollars a few weeks later, so I figured the change had gone through, but apparently that was due to a change in my retirement contribution or something.

My new supervisor (old supervisor's boss - they removed a layer of management) made a comment about my schedule recently and I then remembered that there had been a couple of other situations in which higher-ups had implied that they were not aware of my current schedule. So, I logged into my employee profile at work and, sure enough, my salary was still showing up at the previous level. My former supervisor apparently dropped the ball and never submitted any of the paperwork. So, I immediately contacted my current supervisor to make her aware of the situation.

It has now been a week. I spoke with my boss yesterday and she said that HR is still trying to work out a fair solution. My pay has been decreased starting with this pay period, but they're trying to figure out what to do about the last four months. In the meantime, I have some time off today so I'm trying to do some of my own research to figure out what to expect.

I started my reduced hours on August 1st. The salary will be corrected as of December 10th, leaving 19 weeks of overpayment. My pay cut was $11,500/yr ($221/wk).... so they overpaid me by $4199, looking at my base salary.

I am paid on a base salary + commission model, though we don't always get commission bonuses. Bonuses are paid quarterly.

Decreasing my base means I would have earned a $257 bonus last quarter, though, so I guess if they do the math that way, I would owe them somewhere around $3942.

If I look at my 3rd quarter production statement and my QTD-statement, they've only overpaid me by $1874 (my 3rd quarter bonus balance was $-1069 and QTD this quarter is -$805) .... but that doesn't take into account days off, because days off aren't included in calculating our bonus. (Our bonus is 19% of income produced - "wages paid (excluding PTO)." So I guess technically that isn't accurate because then I was overpaid for my days off?) When I initially emailed her, I figured I'd owe them around $1-2k. Seeing that it could actually be $4k sucks a lot.

Just trying to figure out what to expect and what is reasonable, so that I won't be caught off guard when I get a phone call. Should I expect to pay back $4000, 2000, somewhere in between, or neither of the above? This is potentially going to be a full paycheck or two (paid every 2 wks), so I just want to know what to expect and know if it's legal for them to take the full amount. Everything suggests yes, but everything I'm reading talks about a single overpayment and so I didn't know about an ongoing situation like this.

Please don't beat me up too much for never checking my paystubs... I'm doing enough of that to myself already!

plog

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Re: Question about employer overpayment.
« Reply #1 on: December 15, 2016, 07:52:24 AM »
I'm going to facepunch you for feeling guilty about this situation.  The tone of your post was that you had some responsibility in this.  Perhaps, but at most 10%.  This is on your employer and they should be the ones be conciliatory.  They built their bureaucracy, you made a good faith effort to work within it and they screwed up.  Please take that attitude. 

With that said, you do owe them money.  My plan would be to discuss this with whomever and be willing to have x% taken out of my paychecks for however long it takes to pay this back to them interest free. 

Do not feel like this is your fault or you need to go way out of your way to make them whole as soon as possible. Be reasonable, but not a doormat.     

MayDay

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Re: Question about employer overpayment.
« Reply #2 on: December 15, 2016, 10:03:48 AM »
I had this exact scenario happen but it was like a year.

I transferred departments and got a promotion, so I never noticed they also simultaneously changed my pay from 80% to 100%. HR eventually caught it, decided it was their mistake, and I paid nothing back (this was a fortune 100 company).

A friend's husband just had the same thing happen with the military, and he had to pay ~4000$ back immediately.

So you are not alone, and the outcome can vary.

SKL-HOU

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Re: Question about employer overpayment.
« Reply #3 on: December 15, 2016, 12:13:33 PM »
I had a similar issue with my previous employer (huge company) during FMLA/maternity leave/short term disability where everything is so different that I couldn't tell what was supposed to be what (combined with a baby in the NICU). The accounting department figured it out on their own and since it was their own mess up they asked me what I preferred. One time payment, take it out of 2-3 paychecks, etc? I think since they messed up, they should NOT require that you pay them back immediately. If they ask for immediate payment, then try to negotiate if you need more time.

Can they reduce your paychecks for a few periods going forward? For example, you work 20 hours/week but they pay you for 10 hours/wk until caught up?

charis

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Re: Question about employer overpayment.
« Reply #4 on: December 15, 2016, 12:57:51 PM »
I disagree that you owe them anything, if it was their mistake, or should feel guilty at all.  You alerted them to it as soon as you were aware.  That said, this happened to me once and they took it out of my following paychecks.
« Last Edit: December 15, 2016, 02:30:57 PM by jezebel »

NoStacheOhio

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Re: Question about employer overpayment.
« Reply #5 on: December 15, 2016, 01:11:46 PM »
With that said, you do owe them money.  My plan would be to discuss this with whomever and be willing to have x% taken out of my paychecks for however long it takes to pay this back to them interest free. 

Do not feel like this is your fault or you need to go way out of your way to make them whole as soon as possible. Be reasonable, but not a doormat.     

+1 to this. I think withholding a portion of future pay is a reasonable suggestion. It's not like you're quitting.

TheOldestYoungMan

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Re: Question about employer overpayment.
« Reply #6 on: December 15, 2016, 01:13:21 PM »
I know one person who was fired on the spot for not reporting it sooner, so kudos to you for handling it like an adult and being aware that you could be asked to pay it back.  No guilt need be felt.

WildJager

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Re: Question about employer overpayment.
« Reply #7 on: December 15, 2016, 05:31:35 PM »
A friend's husband just had the same thing happen with the military, and he had to pay ~4000$ back immediately.

So you are not alone, and the outcome can vary.

The military is aggressive about recouping overpayment (but aloof when you try to recover underpayment, weird how that works).  The initial notification is usually very scary for people, but you can always request (via directly or through your commander) a delayed payment plan.  However, many people panic and pay it back immediately if they can.

startingsmall

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Re: Question about employer overpayment.
« Reply #8 on: December 15, 2016, 08:38:04 PM »
Thank you for all of the suggestions, experiences, and (most of all) for making me feel like I'm not a complete doofus for not discovering this earlier.

I'll keep you posted on how it all goes down. I had not considered that they may allow me to pay it off gradually over time. That's what they did when I had to pay them back for health insurance after my maternity leave, though, so I think there's a decent chance that they'll do the same thing again. Phew. That makes me feel better... I could afford to pay them all back at once, but seeing my savings take that sort of hit all at once isn't very palatable. Spreading it out wouldn't be quite so depressing.

I definitely can't see them saying "oops, our bad - but we won't take it out of your pay" like MayDay's employer.... but I can always dream!

MayDay

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Re: Question about employer overpayment.
« Reply #9 on: December 16, 2016, 04:22:03 AM »
A friend's husband just had the same thing happen with the military, and he had to pay ~4000$ back immediately.

So you are not alone, and the outcome can vary.

The military is aggressive about recouping overpayment (but aloof when you try to recover underpayment, weird how that works).  The initial notification is usually very scary for people, but you can always request (via directly or through your commander) a delayed payment plan.  However, many people panic and pay it back immediately if they ecan.

Yes, the horrible thing is, the military simultaneously owes him 1800$ for underpayment while he was in the reserved. It's been 18 Mo this, and they are like "yup, we owe you, were working on it, might be another year though". Yet he has to return the overpayment immediately.

They can afford it fine, he was an officer and now has a great civilian job, buts it's fairly horrifying considering the low pay many enlisted folks receive.

NoStacheOhio

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Re: Question about employer overpayment.
« Reply #10 on: December 16, 2016, 06:02:59 AM »
A friend's husband just had the same thing happen with the military, and he had to pay ~4000$ back immediately.

So you are not alone, and the outcome can vary.

The military is aggressive about recouping overpayment (but aloof when you try to recover underpayment, weird how that works).  The initial notification is usually very scary for people, but you can always request (via directly or through your commander) a delayed payment plan.  However, many people panic and pay it back immediately if they ecan.

Yes, the horrible thing is, the military simultaneously owes him 1800$ for underpayment while he was in the reserved. It's been 18 Mo this, and they are like "yup, we owe you, were working on it, might be another year though". Yet he has to return the overpayment immediately.

They can afford it fine, he was an officer and now has a great civilian job, buts it's fairly horrifying considering the low pay many enlisted folks receive.

Now, a rational person would look at that and say "let's just deduce the underpayment from the overpayment."

Sadly, I know better than to expect that kind of pragmatism from the Department of Defense.