overpayment of severance

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overpayment of severance

I received a phone call from a previous employer that I was overpaid on severance
and they want the gross amount back. Do I owe them and why just a call from HR
with nothing in writing? Not sure how to proceed.

Asked on April 14, 2017 under Employment Labor Law, Kansas

Answers:

M.D., Member, California and New York Bar / FreeAdvice Contributing Attorney

Answered 3 years ago | Contributor

I just wanted to add that as for repaying the gross amount, if occurring in same tax year your ex-employer can modify their payroll tax records and refund the money taken out of your check and remitted to the IRS/state tax dept.  Just ask HR to confirm this. Further, even if they did not do this but reduced your taxable wages, then when you filed your tax return this "credit" as it were would reduce any other taxes that you owe, if any, or increase your refund, if any 

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M.D., Member, California and New York Bar / FreeAdvice Contributing Attorney

Answered 3 years ago | Contributor

Yes, you do owe your former employer this money. The fact is that it was paid in error; you did nothing to earn it. So letting you keep it would amount to what the law calls "unjust enrichment". And it makes sense if you think about if, since if you were mistakenly underpaid, then they would owe you.


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