Separation Overpayment

[Hawkgal]

I spent 15+ years as a salaried employee for a firm based out of Texas. In March of this year, I was told that my position was being offshored to workers in India. A cost-saving measure for the company. I was told I could take a severance package that would have amounted to approx 32K or I could take another position within the company. Unfortunately, I decided to take that position. Once there I found that they mandated extreme OT something that was never told to me prior. I worked it. Then after 4 months was told that my position was again being offshored. No severance opportunity given but I could take another position, again requiring the extreme mandatory OT. I resigned.

Now I have received a form letter stating that they overpaid me $750 and want me to write them a check. I have the money but am, of course, angry that after giving them such much overtime and declining the severance package that they want this small (in their world) amount back. I gave them sufficient time to notify payroll of my last date of employment. Plus, I was told that this happens (overpayment and wanting of the money back) all the time. In fact it happened to a friend of mine over 4 years ago. Seems like they have some ownership over fixing their payroll inadequacies.

That said, I'm an ethical person and just want to be done with this company so I am leaning towards writing them a check. However, I believe that they themselves have ethical issues in that they manuevered this situation into forcing me into an undesirable role so that I would quit and they wouldn't have to fork over the severance money.

Should I pay them? How do I get back the money that I paid in taxes - Federal, State, FICA, Medicare? Plus this money was probably reported as earned income that I will be taxed again on.

Thanks for your help in this matter.

[cbg]

Yes, you should pay them. You have no legal grounds not to. I agree it's petty but they are within their rights, and nothing in the law grants you the right to keep money you were not entitled to no matter whose error it was.

Patty can address the tax issues better than I can.

[ElleMD]

Petty or not, you owe the money. If you do not pay it, your employer can send it to collections which affects your credit report, or take you to small claims court. Either way, you owe. If you were unhappy with their employment practices you were welcome to leave and find another employer, which you did. You do not get to keep any overpayment as your due.

If you pay it back, it will not count as taxable income.

[Pattymd]

Was it $750 GROSS or $750 NET? Did the overpayment occur this year or in a prior year? It makes a difference.

[Hawkgal]

Thanks for your advice.

All the letter says is the amount. No other details

I have sent an email to the only contact provided on the form letter asking for details. I have not yet heard a response.

I would assume from the amount that this is $750 NET pay. It has occured this year.

[Pattymd]

It probably is NET pay, then. If you have more questions once you get the details, please post back.