If my employer accidentally paid me moremoney than I was supposed to make, can it now ask for me to pay it back?

I was notified this week that through no fault of my own my employer has been paying me 10% more than I was suppose to make. Before my supervisor even reported it to the 
HR department for an investigation, she informed me of the error and asked how I would like to pay it back. We are not talking a few hundred dollars my estimate is anywhere from $7,500-$10,000. She informed me that it has been going into my paycheck since late 2008. I think that I need an attorney to represent me in this matter as my employer is a very large corporation and will have lawyers of their own to defend them.

Asked on March 24, 2011 under Employment Labor Law, New York


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

Two different issues:

Legally, can the employer require you to return an overpayment, even if it was their fault? Yes. Making a mistake does not entitle you to keep the money, any more than if you were underpaid due to your fault (e.g. you didn't catch the underpayment on your pay stubs) could the employer refuse to pay you what you're due. Just like they'd have to correct an accidental underpayment, so they can correct an accidental overpayment. If it was their mistake, they can't get anything other than the actual overpayment back--e.g. they shouldn't be able to successfully  sue you for additional damages.

Factually, they need to be able to prove that it was an overpayment--i.e. that they hadn't informed you that you had a higher salary (in which case, even if they wished they hadn't--and may change it for the future--they can't get the money already paid back) and that they computed the amounts correctly.

There should also be adjustments to taxes, to contributions for pensions or 401s, etc. made once any overpayment is resolved.

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