What to do if my ex-employer sold out and paid out their final ESOP payment to the employees via a third party auditing company but I was overpaid?

My payment was $5,000.00 and we used it to pay a bills; now it’s gone. I just got a letter saying the auditors made a mistake and paid half the people too much and half to little. They want me to send a check for $1,100 by next week or they will turn over to a collection agency. Am I obligated to pay them back?

Asked on November 8, 2014 under Business Law, California


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 6 years ago | Contributor

If you were paid more than you were entitled to, then yes, you have to pay it back: a clerical or accounting error does not give someone the right to keep another's money. If you think they are wrong and you are entitled to the money, you can try to prove that to them and, if they won't agree, let them sue you then prove in court that you were entitled to the full amount; but at the end of the day, if you received more than were entitled to, you have to pay them back, regardless of what you used the money for.

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