Hi
My husband has been overpaid for the past 3 years in a salaried position. When he took the position it was a transfer from another office where his pay was a sales draw and bonus structure. His new position is a salary with monthly bonuses.
Basically when he took the transfer he was told that he would be making the same amount as his old job. Now there has been an audit at the company (huge corporation) and they have accused him of knowingly taking an overpayment. He has had a review every year and has been the "graded" within the company structure. (no one bothered to check his salary?)
He has been placed on "Administrative Leave" and fears he will be fired.
He told the HR person that he did not pay very close attention to his weekly stub since its an electronic deposit and I take care of the W-2s at the end of year to take to our acountant. The auditor asked him 10 different ways to admit he knew that he was overpayed -- He basically told him "This is a clerical mistake not me stealing"
Now what. He has offered to "payback" by turning over his bonuses and deducting from his paycheck maybe even tapping into his 401K. If he is fired does he have any rights as far as leaving with his pension, 401K some sort of severance? He has been there 10 years. Please help we just moved into a new house (based on his salary) and have 3 small children I am scared

Unfortunately, your husband has to accept some responsibility in this matter. Even if his paycheck comes direct deposit, he should be receiving a pay stub (or be able to print one online in some systems). I don't check mine every pay period, but I do check every time something is supposed to change, whether it's a salary increase or I'm re-upping for health insurance during annual enrollment.

The company bears some responsibility as well. Unfortunately, the company holds better cards than your husband does.

Whatever rights he has to his pension are contained in the plan documents. 401(k)s are portable. No law requires any company to pay severance, so no one can predict whether he'll be able to negotiate severance.

Because someone in payroll did not fill out his paperwork correctly? Or the 3 managers he had over the past 3 years did not properly process his paper work?
What can he do to resolve this??
He wants to stay at his company -- he truly enjoys his job.
We cannot payback the full amount all at once, he would need to be put on a payment plan. It can't be repaid if he doesn't have a job.

Yes, even if it was the company's mistake, although 1) they should have found it sooner; it leaves a lot to be said for their auditing procedures, and 2) after three years of it going on, I'm surprised they won't at least consider a repayment agreement.

Just so you know, I've been an HR/Payroll professional for over 27 years, and an error that had continued for three years, I would be *embarrassed* to admit, let alone require the full repayment, and in a lump sum. However, there is no law that prohibits the company from demanding repayment. Has your husband asked for consideration of a payment plan?

I have given my opinion on how to handle such a situation several times on this board; however, yours has a twist: your husband actually had a means of knowing that he was being overpaid. Other posters I have responded to had no way of knowing about the overpayment.

If I were the auditor or the person in HR, I would totally buy that your husband was positively cluless about the finances. My husband couldn't even tell you how much his annual base salary was with his last employer...BUT I COULD...and to the penny!

HOWEVER...
If I were sitting in the auditor's shoes, I would also be looking at the amount of the monthly overpayments, and what percentage the overpayments represent of his gross pay. To be perfectly honest, what might be making your husband's story unbelievable is the amount of the overpayments. Let me give you an example. Jack is supposed to earn 50K annually. Because of overpayments, Jack is actually earning 56K annually. Would I believe that Jack, or Mrs. Jack for that matter, didn't notice that they were earning 12% more than they were supposed to, or an extra $500 per month on that income level? NOT A CHANCE.
Second example. Joe is supposed to earn 150K annually. Because of overpayments, Joe is actually earning 156K annually. Would I believe that Joe never noticed these overpayments? Absolutely. The difference between those two salaries is only about 4%.

I do believe you when you say that the mistake is legitimate. However, I don't really think that you have a snowball's chance in hell of convincing his employer that never once in three years that he didn't look at a pay stub. And to boot, he just bought a house, which requires full financial disclosure (and please don't tell me you signed the paperwork for him).

If the amount of the overpayments were very modest, then it is possible that he could get others on board (like his supervisor, HR, site mgr.) that he should not be penalized for someone else's continued mistakes. By the way, what gives this auditor the sole authority to put him on leave, or am I misreading it?

I guess it boils down to these questions: How much was he making and how much was he supposed to be making?

Well After I posted to this website we decided to hire a lawyer to negotiate some kind of repayment.
Our lawyer was in the midst of trying to get the company to settle on a lesser amount of repayment because he felt my husband was not 100% culpable and the company should just eat some of the cost (not to mention we paid taxes on it already and whatever the repayment was would be After taxes -- essentially we would be paying on it twice).
Well he was fired.
Can he file for Unemployment compensation?
Can he leave with his pension and 401K or will they try to use that as "repayment"?
Can they still try to get him to repay the overpayment in full ?-- obviously he can't if he doesn't have a job.
He also was in the midst of a couple of deals where he would be earning commission -- could he still be paid on those? (One was a significant amount).
I'd like the panels take on this before (or even if) I ask our attorney any of these questions. I still can't believe he was fired if he was trying in good faith come up with a repayment schedule. :confused:

Can he file for Unemployment compensation? Sure, he can file. Whether benefits will be granted or not, though, we have no idea. What did they say the reason for his discharge was?

Can he leave with his pension and 401K or will they try to use that as "repayment"? Generally speaking, yes, those funds are exempt from such a recovery of the type that has occurred here. However, I admit this is not my area of greatest expertise, so..............cbg?

Can they still try to get him to repay the overpayment in full ? Sure, they can. They can sue in civil court, if they want to, and get a judgment they prevail.

He also was in the midst of a couple of deals where he would be earning commission -- could he still be paid on those? We would have no idea. That would depend on the terms of the commission agreement.

he was told that he could say he "resigned" -- that is what his paperwork will read.
Unfortunately they will be packing up his desk and he had to hand in his laptop so he doesn't have easy access to any of his paperwork re: commissions, Pension plan , etc.

There's no reason he cannot ask for a copy of the commission agreement and the SPD (Summary Plan Document) for the benefits. He is entitled to SPDs annually (or when changed) and upon request.

Just to confirm, in the absence of a court order specifying otherwise, pension and 401k monies cannot be withheld to constitute repayment.

Thanks for the info.
He hasn't heard anything form his HR person, He has not received separation papers or even the stuff from his desk that they said they would pack up for him. Does anyone have any suggestions as to how to approach this situation.
We are waiting for the "other shoe to drop". I'm afraid we will get some sort of bill demanding the back pay. I really don't know if they can do that, Can they?