Can my employer require me to repay a bonus that they claim was miscalculated, even though they had previously signed a paper confirming its accuracy?

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Can my employer require me to repay a bonus that they claim was miscalculated, even though they had previously signed a paper confirming its accuracy?

I am an hourly employee but I am also eligible to receive a monthly bonus check if I meet the company’s performance requirements. Today, I was told that my previous bonus check had been miscalculated and that they would be deducting that amount from my next bonus. However, my manager, my general manager, and I signed a document last month that verified the accuracy of the bonus payout. Is this signature binding or do they have the right to take this money back from me?

Asked on August 15, 2011 Florida

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

The issue depends upon the nature of the alleged error. If it was a simple math error, even if one that the three of you did not catch on review, they may indeed seek the return of the money--making a mistake, even signing a document containing the mistake, does not create a right to compensation you did not earn. So, to use a simple example: say that you work in a "widget" factory and get an additional $1.25 for each widget over 5,000 you make in a month. If you made 2,000 extra widgets, you should have gotten $2,500 more; if they accidentally multiply by $1.50 instead, when the bonus plan, documents, etc. all show they should have multiplied by $1.25, they can seek the refund of $500 when they catch the error.

What they can't do is decide they are being too generous. So say that you had a letter saying you receive $1.50 for each extra widget. They can't later say that they "meant" to only offer $1.25. They could make that change for the future, but for widgets made to date, you should be paid at the agreed upon rate.

So changing their mind or rethinking the bonus--no, they can't recover it. Somebody made an easily proven typographic or mathematical error--yes, they could recover the overpayment.


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