What are the rules regarding overpayment at work?

[Carrie231]

I have recently been informed that I have been over-paid at work, dating back to my 1st paycheck, which was 6 months ago.

I wanted to know what the rules where with regards to paying back as it is a large sum of money (over �2000!) and the persons that paid me incorrect where not the actual HR personnel as that person was on long term sick leave, but 2 Directors that got together and tried to sort out the pay for the company. And they from the start messed up mine. Do you need to have HR Qualifications to be able to do Employees pay? Or can Directors do it?

I have also since I started changed my lifestyle as I brought a car and changed flats but on the basis that I thought I was being paid correctly!! Had I have know it was incorrect my life would be completely different!!

So I was hoping that someone somewhere would know of anything that I could do to hopefully resolve this..

Thank You

: - )

[alijangra]

Unfortunately I think the onus is on the employee to check they are being paid correctly.

[WoWo]

You have to pay it back I'm afraid, however they have to be reasonable about the time in which you do it. If it was going to cause you hard ship it would be reasonable to pay back say �10 a week.

However the longer that goes on the longer you will be in debt so I'd suggest paying as much as you can.

A quick calculation shows that �2000 over six months is �333 a month extra before after tax, thats a lot of money extr, have they over paid you �2000 before or after tax?

[antiguru]

There is no qualification required to pay employees, so anyone authorised by the company can do it. You definitely have to repay the company but actually it might be tidier to do it via payroll deductions over a period of time so that the tax implications can also be straightened out for you and the company. I suggest you talk to the company about a 12 month repayment scheme, with the balance being payable if you leave the company in the meantime.

[undercovers]

i do not think that the problem is as clear cut as previous posters have indicated, i am no expert but i believe a defence of 'change of position' may be available in cases of this kind, i'm sorry i don't have the necessary books with me at the moment but this website i think offers some ideas re just one case http://www.pcs.org.uk/Templates/Internal.asp?NodeID=899035

so as you do not have the money available and have used this to fund purchases etc. and would already be in financial hardship due to the reduction in pay following their discovery you may well be able to argue that it would be too much of a hardship upon you to pay anything back, other than that other possibilities are open to you as mentioned to pay back slowly etc.

but as alway i would recommend that you see a solicitor asap to discuss this matter, many will give you a free first half an hour to discuss the possible outcomes.

good luck - undercovers

[undercovers]

ooo and the CAB office can also be very good with free legal advice of this kind and would be well placed to discuss employment issues with you - maybe they should be your first point of call. in the mean time tell your employers that you cannot discuss until you have had proper legal advice.

[Ward-Minter]

If you keep it, it is straight forward theft.

Dishonestly (you know you shouldn't)

Appropriates (take it as yours)

Property (money)

Belonging to another (the company)

simple, give it back soon. They may give you a little "honesty reward" or also consider agent provocateur!!!!

[Peter Pedant]

WM is not usually wrong, but I think he may be on this. The truck acts used to govern wages and now I think it is the erm 1986 Wages Act.

You need advice from a solicitor - money I am afraid - because basically it is a long time ago, and you thought you were being paid the right amount, and relying on that, you have spent it.

I have to say, I thought there was specific relief for these circumstances.

Otherwise negotiate a meter-ed repay settlement - I thinnk the Act also takes into account the impossibility of lump-sum repayment.

COI - I ws overpaid when I was 16 when I ws a hand at one of my father's frenz factories, and I was treated as though I had stolen the money. It still rankles....(repaid as lump sum)

[Ward-Minter]

Interesting, mr Pedant.

I am assuming these circumstances are akin to receiving too much change in a shop. That is simple theft I believe. I fail to see the difference. Further I am aware of case law regarding too much money being given out at cash machines. Again, simple theft.

My knowledge of the Wages Act I admit, is non existent. Employment law is so boring.

[ugly_bob]

I may be a bit off track here - and definately off subect, but I don't believe that shops are obliged to give you change.

It's the 'done thing', but I believe it is down to the buyer to provide the correct money for the purchase, and the only legal obligation from the vendor is not to charge them more than the advertised price

[gammaray]

It may be worth checking with your tax office because you may well be due a rebate as you would have been paying tax on a larger salary. It may also be worth contacting them to make sure your tax and NI has actually been paid to the revenue. If payroll was handled by a couple of directors who obviously hadn't a clue about payroll, they may well not have been calculating your tax and national insurance correctly or making the correct payments to the revenue.

[THECORBYLOON]

This is from the UNISON site.

"Overpayment of wages

Q. Can employers recover overpaid wages?

Under the common law principles, which a civil court would consider, this depends upon whether the overpayment is due to a mistake of law or a mistake of fact. However, it should be noted that an employment tribunal has no power to consider an application which relates to the recovery of an overpayment of wages under the protection of wages provisions.


Q. What is a 'mistake of law'?

It is classed as a misunderstanding or misinterpretation of a policy and in these circumstances wages cannot be recovered.


Q. What is a 'mistake of fact'?

It is seen for example as a clerical error, an accounting error, or a computer error. The employer is prevented from recovering the overpayment if the following conditions apply:

the employer has led the employee to believe that he or she is entitled to treat the money as their own
the employee has changed their position to the money, ie spent it
the overpayment was not caused primarily by the fault of the employee. "

[ra2000]

The answer is that the money needs to be repaid. the law of equity will require that the correct situation be implemented.

The answer is obvious when you consider from the other viewpoint.

If you found out that they had UNDERpaid you - would you accept the situation. Would you accept THEIR argument that you had managed all right so far; hadn't missed the extra money for the past 6 months; and that the company had spent/invested that money so don't feel obliged to pay you?

No, of course not.
You would expect this reversed situation to be corrected. Well what works one way, works the other way too.

[Murielmci]

The principle of estoppel applies here. If you knew you were overpaid then you are due to repay it . So a sudden rise in one month's pay you know about and although the mestake was not yours you do need to repay. The circumstances you describe means that you had no reasonable way of knowing and (importantly) it will cause hardshop to repay. Write a nice letter expaining that you consider the law of estoppel to apply, you had no way of knowing you were overpaid and it will cause hardship to be asked to repay.

Of course your wages go down now - estoppel only applies with what you didn't know and you know now! I used to use Croners Employment Law and estoppel is very clearly explained in there. Does your HR department have a copy? Alternatively ask a CAB to look up estoppel for you. (I am an ex bureau manager and used this argument frequently with employers and the benefits agency)

[ian.miller]

If you were just starting a new job, and so knew your starting salary, the first paycheque you would have checked, or at least 1 in the following six months and you would have known it to be wrong.

I am suprised you didn't realise that you were being overpaid some �350 a month.

[auzzie]

I'm with Ian on this one! You must have worked out that your wages were wrong.I cannot believe you didn't work out how much your pay would be each month before you took the job on! Treat it as an interest free loan and pay it back.