Can a company withhold a person’s next pay if it over paid on the last check?

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Can a company withhold a person’s next pay if it over paid on the last check?

My sister’s employer paid them a bit more on a pay just over $100 and now is trying to not pay them at all for weeks. She works part-time at a fast food restaurant so she gets paid every 2 weeks and on top of that only working a few days out of the week. Is it legal for it to simply not pay them for a mistake the company made?

Asked on February 24, 2016 under Employment Labor Law, New Jersey

Answers:

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

Answered 5 years ago | Contributor

An employer cannot just isue a paycheck in order to deduct for a previous bookkeeping error. An employee is entitled to compensation for all hours worked. This is true, unless your sister gave her express written consent otherwise. However, this does mean that she is entitled to benefit from her employer's mistake, as this would constitute "unjust enrichmnt" and the law provides a legal remedy for this. Accordingly, she can simply work out a repayment arrangement or risk getting sued (an terminated from her job).

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 5 years ago | Contributor

No, an employee must be paid for all work he or she does, so even if the company made a mistake and overpaid previously, the employee must be paid after that for the work she does; pay not be debited or withheld for the mistake.
However, a mistake also does not entitle your sister to keep the money; the law specifically says that if you receive money in error, you have to return it. Her employer could sue her for the money; they could also choose to terminate her, for refusing to repay an error. (Though they'd need to pay her for all work done up to when she is terminated.) She needs to decide if the amount of overpayment is worth the possibility, for example, of losing her job.


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