Options for unexpected wage overpayment?

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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

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 2 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.


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