Can an employer deduct an overpayment from PTO?

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Can an employer deduct an overpayment from PTO?

I started working at my salaried job in Nov. 2014 and before starting had an agreement that I would be taking unpaid time off over the holidays. Not being able to take this unpaid time off at the beginning would have been a deal breaker for me in accepting this position. Payroll incorrectly paid me anyway, and I brought this matter promptly to their attention. They did not get back to me and I forgot about it. Then earlier this year, they asked if I wanted to pay back through deductions in my PTO or in segments through my paycheck. I opted to pay back through my paycheck because I really value my PTO. Today I found out that they are planning to deduct the overpaid time from the PTO I have accrued in the meantime. Is this legal? My salary is now higher than it was when they overpaid me 2 years ago.

Asked on November 21, 2016 under Employment Labor Law, California

Answers:

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

Answered 4 years ago | Contributor

Unless you have a union agreement or employment contract that prohibits this action it's legal. Also, your treatment must not constitue any form of legally actionable discrimination (which it does not appear to). The fact is that most employment is "at will" which means that a company can set the terms of the workplace much as it sees fit. Additionally, PTO is generally a discretionary benefit, so an employer can has a great deal of say over when and how it us used.


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