If I may have received a direct deposit in error from a former employer 6 months after leaving, what to do?

About 6 months after being laid off from my former employer, a large home builder, I received a 9k direct deposit. I did not receive a pay stub or any notification, just the direct deposit. I was paid partially on commission and the 9k payment and approximate time of the deposit coincide with the commissions I should have received if I was still employed. I was paid after the houses closed, typically 6-12 months after contract However, when I was laid off I was told that I would only receive commissions for 3 months following termination and that I signed something to that effect when I

accepted the position. It has been 2 weeks, the money is still in my account and I haven’t touched it. Am I legally obligated to contact them about this or can I just wait to hear from them if there is a problem? It has been 2 weeks. Can they reverse the direct deposit? Can they force me to give them more that the direct deposit amount, what the pre-tax amount was I’m guessing around 15k? If so, I am 100% unable give them more than they deposited. Do I have any legal recourse if they want me to pay the net amount rather than the exact amount I received?

Asked on March 9, 2017 under Employment Labor Law, South Carolina

Answers:

M.D., Member, California and New York Bar / FreeAdvice Contributing Attorney

Answered 3 years ago | Contributor

You can wait for your former employer to come to you about this overpayment; you are under no duty to inform them of the mistake. That having been said, if they do contact about making repayment, you are obligated to pay it. The law disfavors "unjust enrichment", which is what this would be; you did nothing to earn this extra pay. As for the net versus gross amount, if your ex-employer ask for the pre-tax amount (i.e. the gross), contact the IRS to ask about getting money back on the reversal of the wage payment.

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 3 years ago | Contributor

First, you are not obligated to affirmatively go and tell them about the payment--it is possible that they intended to make it, or even if not, you are not obligated to fix their mistakes (you  can't *cause* them to make a payment to you if you are not entitled to it, but that's not the same thing as having to go out of your way to fix errors you had nothing to do with). However, you should sequester--put it aside in case they do ask for it back. If they do ask for it back, you would have to return it, assuming that under the circumstances, it was an error and you are not entitled to it: the law is clear that a mistake does not entitle you to money you don't otherwise have a right to.
As to net vs. gross amount: if they ask for the gross (pre-tax amount), contact the IRS to ask about getting money back from the IRS when a wage, etc. payment is reversed--you need the IRS to explain (and provide some documentation, if necessary) about whether the tax payment goes to the employer or employee. Whomever would receive it is the one who would have to request and process it. If it were you, you would then return the money to the employer when it comes back to you.


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