Must I repay a supposed overpayment on a prevailing wage job?

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Must I repay a supposed overpayment on a prevailing wage job?

My employer has come to me and some others and told us today they were overpaying us by $49 an hour. This was a prevailing rate job that we never had been given rate details on prior to starting the job. We were all paid $81 per hour for a period of nearly 3 months. Now that the job is coming to a close they have come to us and say the rate should have been $32 per hour. They are asking us to pay them back with any future overtime, which in my case could take 2 years minimum. Do I owe them this money. I have direct deposit and all of these payments were approved. Do I owe them repayment?

Asked on June 20, 2011 under Employment Labor Law, Pennsylvania

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

You probably do not owe them the money, though you should consult with an employment law attorney if the company presses forward with the action; you may need to defend yourself from a lawsuit.

Generally speaking, an employee would only owe back money if 1) the employee did something wrong (e.g. falsified time records; lied about credentials to get a higher rate) or  2) it was obvious that the employee was paid too much (for example, pay was $20 per hour--then all of a sudden, without a raise, it went to $40/hour, which clearly means there was an error in payroll or HR). In this case, while you knew it was a "prevailing wage" job, if you were not given details of what that wage was, it's not clearly an error to be paid $81 per hour. Just because the company may have paid you more than they needed to does not automatically give them the right to reimbursement.

Going forward, they could almost certainly reduce pay, if they can show what prevailing wage should be. But it is most likely that since there was no basis for you to know this was an overpayment, that they can't get back and past "overpayments"--you were simply paid what they voluntarily chose to pay you. Again, though, if legal action is taken, you will need to defend yourself, so if they move forward, you need to consult with an employoment law attorney.


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