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overpayment in new jersey New Jersey

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  • overpayment in new jersey New Jersey

    Help! I was overpayed for one year and now my employer wants to hold my salary increases over the next three years to repay the amount. Also, they are putting my pay rate back to the original rate I was hired at. Is this legal? I am concerned about the repayment and about taxes that were payed on that money. Thanks for your help.

  • #2
    The company can change your rate of pay for work you have not yet done.

    At least they are not asking you to repay 52 weeks of overpayments in your next several paychecks (they would need your written agreement to reduce your net pay).

    What they are doing is generous. Three years is a long time and they must be confident that you are a dependable employee who will stick around.

    You received money in the past and paid taxes on it (so did the employer -- FICA, unemployment taxes and WC premiums). You won't be getting pay in the future for what you already paid taxes on, so the tax issue is a non-issue.

    It would be nice for them to lay out, in writing, just how they figure this all works, in dollars overpaid and dollars not paid in the future to repay the gross amount.
    Senior Professional in Human Resources and Certified Staffing Professional with over 30 years experience. Any advice provided is based upon experience and education, but does not constitute legal advice.

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    • #3
      one more question

      What can they do if I leave the job before the three years it up? Do they have the right to make me pay the remainder back? Thanks!!

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      • #4
        They sure do, more than likely, you wil find yourself in court over the issue.
        Somedays you're the windshield and somedays you're the bug.

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        • #5
          If you were truly overpaid, yes, they can require that you pay the balance back. They can sue you for the remainder if they choose to.

          You are very lucky that they are giving you the option of paying it back over time. Many employers would have demanded that you write them a check on the spot - and they would have been within their rights to do so.

          Regardless of whose mistake it is, you are not entitled to keep pay you did not earn and were not due.
          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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