May an employer claim error in the amount of severance pay once the check has been issued and deposited?
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May an employer claim error in the amount of severance pay once the check has been issued and deposited?
Position was eliminated, which resulted in my termination. Regional VP
terminated me and handed me 3 checks, one for days worked in the current
week, one for unused vacation and one for severance pay. After leaving I went to
the bank and deposited the checks. The next day I receive an email from the
same VP informing me there was an error in the severance pay, that they were
canceling the first check and reissuing a replacement check.
Asked on April 22, 2016 under Employment Labor Law, Texas
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 8 years ago | Contributor
It depends by what is meant by "error":
1) If they mean that the amount was discretionary and they simply have re-thought the amount they want to issue you, they can't change that once the check was issued and deposited: merely wanting to change their mind does not let them "call back" money they already paid you.
2) But if there was basically a mathematical error in what was a known formula for determining your severance, they can correct that error: the law may not allow peoplet change their minds about this, but they can fix typographic or mathematical errors. So say that the policy in your company, and what you were told, is that they pay 1 week severance plus 1 week per year of service, and you worked there 5 years. You should therefore get 6 weeks severance. If someone accidently gave you some other amount (e.g. 7 weeks), they could recall that check and issue another, to correct a mathematical error in a formula known to you.
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