How long does an employer have to inform an employee of an accidental overpayment that needs to be repaid?

UPDATED: Oct 1, 2022

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How long does an employer have to inform an employee of an accidental overpayment that needs to be repaid?

I recently quit my job at a bank.wells fargo bank. They over paid me for paid time off because I took more time off then I accrued because I left before the end of year. They sent me a letter 60 days after giving me my final paycheck informing me of the overpayment and my responsibility to repay. So my question would be is there a statute of limitations on how long they have to inform me and collect? Waiting 60 days to inform me semms like a long time.

Asked on December 27, 2017 under Employment Labor Law, California


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 4 years ago | Contributor

They have at least two years to inform you of the overpayment, seek its return, and sue you if necessary. This is considered a contract action: it arises out of the agreement or understanding between you and the employer under which you agreed to work and they agreed to pay you a certain amount. As a contract action, even if this agreement or understanding was oral (unwritten), the statute limitations is at least two (2) years. Given that the law is very clear that an accidental overpayment does not entitle you to keep the money, you have to return the overpayment; if you don't, they can sue you anytime they want during the next almost two years.

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