What can happen regarding an overpayment by an employer?

I resigned from a job and have been employed elsewhere for 8 months. I realized after I left that I had been overpaid by my previous employer. I did not contact them to disclose this and now I have been asked to return and be re-hired. If I am re-hired,and do not disclose the overpayment to my salary when previously employed and the employer discovers this, can they make me pay it back or withhold it from my earnings if it’s 2 separate periods of employment?

Asked on December 11, 2018 under Employment Labor Law, North Carolina

Answers:

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

Answered 1 year ago | Contributor

As for overpayments in general, an employee does need to repay an employer for any monies accidentally paid to them. Otherwise, the worker would be "unjustly enriched". And this makes sense when you think about it. If you had been mistakenly underpaid, you would have the right to collect the shortage. However, depending on how long it been since your overpayment, you may not have to pay it back. There is something called the statute of limitations. This is the time period in which a person has to bring a lawsuit. So, for example, if the overpayment was just months ago, then the employer can collect. If it was 5 or more years ago, then probably not. It all depends on specific state law. Just be aware that, if you are an "at will" owrker (i.e. one who is not covered by a union agreement or employment ocntract), then you can be disciplined (up to suspension or even termination) for any reson or no reason at all. Bottom line, you'll have to weight the above information and decide if you should disclose the overpayment or not.

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

Answered 1 year ago | Contributor

As for overpayments in general, an employee does need to repay an employer for any monies accidentally paid to them. Otherwise, the worker would be "unjustly enriched". And this makes sense when you think about it. If you had been mistakenly underpaid, you would have the right to collect the shortage. However, depending on how long it been since your overpayment, you may not have to pay it back. There is something called the statute of limitations. This is the time period in which a person has to bring a lawsuit. So, for example, if the overpayment was just months ago, then the employer can collect. If it was 5 or more years ago, then probably not. It all depends on specific state law. Just be aware that, if you are an "at will" owrker (i.e. one who is not covered by a union agreement or employment ocntract), then you can be disciplined (up to suspension or even termination) for any reson or no reason at all. Bottom line, you'll have to weight the above information and decide if you should disclose the overpayment or not.


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