Is it legal to take money out of my checking account because the company over paided me?

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Is it legal to take money out of my checking account because the company over paided me?

I was over paid $1000 and now the company is taking their money back. So Iam no longer receiving paychecks because basically I owe a debt to them. They are trying to take back the full amount so doesn’t that means I never got paid at all? Do Ireally have to pay for someone else’s mistake?

Asked on December 29, 2011 under Employment Labor Law, Missouri

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

Two different issues:

1) Do yo have to return money which you were overpaid? Yes. An administrative or accounting error does  not entitle you to keep the extra money. So just as you would--correctly--expect to have the money returned (or at least credited for your benefit) if you accidentally wrote two rent or mortgage checks one month, since the fact you made an error would not let your landlord or bank keep your money, so, too, do you have to return money you were overpaid.

2) However, the employer may not simply withhold money from your paycheck to recover the overpayment, not unless you agree to let them do this. If they want the money back, you either have to give it back to them voluntarily or they can sue you for it. Of course, if you don't have an employment contract, you could be fired by your employer if you refuse to give back an overpayment; they may even be able to call  this "termination for cause," viewing it as either theft (keeping something to which you are not entitled) and/or insuborination, and thereby deny you unemployment compensation.


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