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Overpaid Wage Recovery California

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  • Overpaid Wage Recovery California

    We overpaid an employee $420 in California, and it seems that we are unable to recover this through payroll, under Section 221 of the CA-DLSE manual. Fortunately it's such a small amount, so we probably won't even bother with Small Claims Court.
    But if this was an egregious error (say a typo turned $3,000 into $30,000), this still seems to be the case. Though for that amount, we'd definitely sue, but it would be more than small claims court for that amount of money.

    But why can't I treat it as an advance ?
    Of course, the employee would still need to be paid at least minimum wage, though we're not anywhere near that. He makes approximately $2000 semi-monthly and we were going to deduct $210 over the next two pay periods.

    The employee is a non-exempt, piece-rate

  • #2
    But why can't I treat it as an advance ?

    Because the law says you can't.

    It really is that simple.
    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
      Agreed. Your statement implies that advances are somehow treated differently under CA law. Or federal law for that matter. Most advances are in fact taxable under federal law since the law got changed under OBRA '93. CA law is pro-employee in that there legally are a very few types of legal deductions permitted and court cases in this area were pro-employee, and this is not one of them. But CA is far from the only state with restrictive deduction rules (compared to the federal rules).

      If you are talking commission employees, there is a lot of advantage to paying MW up front, and the balance later. There is also an advantage to having well written commission agreements, such as calculating commissions of the final number, such as paid and not just sold.
      "Reality is that which, when you stop believing in it, doesn't go away".
      Philip K. **** (1928-1982)

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      • #4
        Originally posted by cbg View Post
        Because the law says you can't.
        I was actually looking for a citation...

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        • #5
          Originally posted by DAW View Post
          Agreed. Your statement implies that advances are somehow treated differently under CA law. Or federal law for that matter. Most advances are in fact taxable under federal law since the law got changed under OBRA '93.
          If I give an employee an advance on their pay, coz they're have an immediate need, am I supposed to pay them their FULL pay next period, because I can't deduct the advance ? And then request they give the advance back ? What about the extra payroll taxes I have had to pay ?

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          • #6
            The OBRA '93 law is a citation.
            "Reality is that which, when you stop believing in it, doesn't go away".
            Philip K. **** (1928-1982)

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            • #7
              Let's say that Bob is normally paid $1,500 per BW pay period. Lets say that we advance Bob $500. Since 1993 under IRS rules we have issued one payroll check for $500 and a second payroll check for $1,000. Not an advance per IRS. Taxes due on both checks.
              "Reality is that which, when you stop believing in it, doesn't go away".
              Philip K. **** (1928-1982)

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