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How to handle overpayment - TX Texas

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  • How to handle overpayment - TX Texas

    I was a salary employee for a company. I got paid a fixed amount biweekly. I was laid off about 6 months ago. At first I was told I would get a severance package, but since I hadn't been w/ the company over a year continuously, I was later told I didn't qualify. But I did ask if I would be paid out for my accrued PTO balance, on top of my remaining time work to be paid. The HR manager told me he would get back to me on that. Well I never heard back from him. But I did get a paycheck via direct deposit later that week, but for my normal biweekly amount. According to my calculations, it was about $500 short of what I should have been paid for a final check, w/ my PTO paid out. But I waited, and 2 weeks later, I got another direct deposit for my normal biweekly check. So by this point, according to my calculations, Ive been over paid what I should have. But 2 weeks later, I recieved another deposit, for my regular amount. This has been going on since then.

    My question is, what are the Texas laws on overpayment of wages, if I no longer work for that employer? I never signed any kind of agreement regarding repayment of wages when I worked with them. Or any kind of permission to garnish my wages. They have not caught this mistake so far. But I am wondering, for future referance, what the reprecussions might be.

    Thank You

  • #2
    There is NO state, where employer error means you are free to keep an overpayment. Sooner or later they will find it; if you refuse to repay it they will sue you, and they will win.
    The above answer, whatever it is, assumes that no legally binding and enforceable contract or CBA says otherwise. If it does, then the terms of the contract or CBA apply.

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    • #3
      Well I figured that. But I have been told that in some states, if the mistake isn't caught within a certain time of the mistake being made, they can only recover a certain amount/percentage. Also, if the repayment would have to be made in payments, or a lump sum, and if interest will be owed on the amount. Or, since it was done by direct deposit, if they can pull the funds from my account without my authorization.
      Last edited by ElPasoEmp; 03-27-2007, 12:39 PM.

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      • #4
        You were told wrong. There is no statute of limitations on the money. I suggest contacting the former employer and either offering to pay it back lump sum or working out a payment plan.
        I post with the full knowledge and support of my employer, though the opinions rendered are my own and not necessarily representative of their position. In other words, I'm a free agent.

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        • #5
          I would think if you bring this to the employers attention now, they will be more willing to work with you in repaying the overpayment than if you wait a year or two for them to find out.

          It will be less of a headache with tax issues if you just correct the problem now. And frankly, it should have been corrected a lot sooner than six months later. Just because they made a mistake doesn't mean you are innocent of keeping the money.

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          • #6
            There is sort of two different issues here. One is whether or not the employer can legally recover funds from an employee's paycheck. There are federal (FLSA) and (sometimes) state related rules regarding this which can place limits on recoveries. The other issue is whether the employer can take the former employee to court and get back the money the old fashion way. The federal and state (if any) rules on recoveries do not prevent the employer from using the court route.
            "Reality is that which, when you stop believing in it, doesn't go away".
            Philip K. **** (1928-1982)

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            • #7
              Although yes, in a few states there is a statute of limitations on recovery, it's a matter of years, not months.

              The longer you wait to make them aware of it, the more you're gonna have to pay back.
              The above answer, whatever it is, assumes that no legally binding and enforceable contract or CBA says otherwise. If it does, then the terms of the contract or CBA apply.

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              • #8
                And, if the overpayment occurred in 2006, you have already jumped into the "more complex tax situation" arena.
                I don't respond to Private Messages unless the moderator specifically refers you to me for that purpose. Thank you.

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