Options for unexpected wage overpayment?

UPDATED: Oct 1, 2022

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Options for unexpected wage overpayment?

I’m asking for a friend
This friend quit her previous job several months ago and has been working at a
lower rate with a startup since then. She just received a letter today informing
her of overpaid wages by this previous employer. As this is tax season, she isn’t
sure how she’s going to be able to pay the taxes she’s expecting to owe and the
payback amount.

What are her options right now?

Asked on January 28, 2019 under Employment Labor Law, Indiana


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 4 years ago | Contributor

Assuming she owes the money--and she should ask for evidence of the overpayment--she will have to repay it: the law is very clear that a mistake does not let you keep an overpayment. Her best bet, if she does owe the money, is to try to negotiate a payment plan to repay it over time. If she and her former employer cannot work out a payment plan and they choose to sue her, if they can prove the overpayment, they will win and get a court judgment requiring her to repay all the money immediately. Of course, suing has its own costs, in time and money, so they may well be willing to enter into a payment plan to avoid having to sue.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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