Who is more responsible employee or employer? (Pay related)

[UncleEJ]

Say you started a new job. You negotiated a salary of X per month. You get paid on the 1st and the 15th of each month. You are expecting to receive 1/2 of X at each pay check. When you receive your first pay check (direct deposit, pay stub only accessible through an external website) and it is the full amount of X, not half. You think hmm, maybe I misunderstood, there was a lot discussed during that first meeting. You don't really say anything, kind of forget about it and move on. Months later the company finally notices the discrepancy and wants all the money back that was overpaid.

 

Who is more responsible?

Should the employee have noticed and said something?

Should the company have noticed?

Should the employee be responsible for repaying?

 

I am in the middle of similar situation and would like some input. I'll give more detail after I hear some thoughts. Thanks!

[vonfirmath]

So on the 15th, employee got paid all of X as well?

 

At that point, I'd have gone and talked to them.

 

We have occasionally been double paid where I worked now.  It's still not money we earned. Its the employer's money and they have the right to take it back.

 

So I'd say the Employee should have noticed and said something. The employer should have noticed and fixed it. The employee is responsible for paying it back

 

But given it went on for so long, there should probably be accomodations  made to pay it back over time or something.

 

(Check the law as well. It is possible the employer can only recoup for X amount of time and not the FULL time depending on how long this went on)

 

 

[bettyandbob]

The employer has every right to the money overpaid. The employee needs to return the overpayment. The employee never earned the money. Even if the employer mistakenly overpaid that does not mean employer cannot get the money back. The money never belonged to the employee.

 

It doesn't matter who noticed first, except that the first to notice (employer or employee) should have sought to correct the error upon noticing it.

[Flowing Brook]

I think it is up to the employee to call and  see if it was a mistake or not. 

Recently the lady I work for started paying me five dollars more a week. I called to see if it was a mistake or not.  Turns out she had decided to give me a raise without telling me. 

 

I can see how this could happen. The company should have been paying more attention.  Maybe you could negotiate to pay back half since there is fault on their end.

[GSOchristie]

I, too, would have checked to make sure the employer knew the overpayment at the beginning, but since that ship has sailed, I would say it is the employee's responsibility.  Did the employee sign a contract agreeing to the salary?

 

[UncleEJ]

So on the 15th, employee got paid all of X as well?

 

At that point, I'd have gone and talked to them.

 

We have occasionally been double paid where I worked now. It's still not money we earned. Its the employer's money and they have the right to take it back.

 

So I'd say the Employee should have noticed and said something. The employer should have noticed and fixed it. The employee is responsible for paying it back

 

But given it went on for so long, there should probably be accomodations made to pay it back over time or something.

 

(Check the law as well. It is possible the employer can only recoup for X amount of time and not the FULL time depending on how long this went on)

Yes, employee was paid all of X again on the 15th. So double paid. Part of the reason it was not noticed is because employee is paid a salary of X, in addition to a daily bonus of Y for each day on a job site. So when pay checks came in it was easier to miss the overpayment of X if that makes sense.

[momto10blessings]

I'd think that the employer is at fault. The employee probably should have clarified the amount, but it's not like the employee was writing her own check. The payroll employee is more at fault than the paid employee.

[Sherri in MI]

So the employee got paid 2x per month with each paycheck being the amount of one month's salary - is that correct?

 

The employer goofed, but the employee should have noticed and reported the overpayment.  The money never belonged the employee in the first place, so they are responsible for paying it back.  I agree with the poster that some payment arrangements should be made.

 

The schedule for paychecks is usually written in writing somewhere - either an employee manual, or a separate printed schedule.

 

[Alte Veste Academy]

Honestly, I would have said something when I got the first paycheck. Someone probably made a data entry error for the initial month, which means the employer would be much less likely to catch the error in an automated pay system whereas the employee had a chance to catch and report the error from the start instead of letting it go on, which would have made for a quick, painless fix. As rotten as it is, the money should be returned, hopefully on a payment plan though, as the initial error was the fault of the employer.

[Anne]

I am responsible for payroll at my dh's company.  If this had happened to me, I would assume that the employer and employee were jointly responsible, and would come to some compromise with the employee to resolve it.  The employee would still need to repay the entire amount, imho, but we would have a generous payback time.

 

Anne

[UncleEJ]

The employer has every right to the money overpaid. The employee needs to return the overpayment. The employee never earned the money. Even if the employer mistakenly overpaid that does not mean employer cannot get the money back. The money never belonged to the employee.

 

It doesn't matter who noticed first, except that the first to notice (employer or employee) should have sought to correct the error upon noticing it.

Logically, I agree. Emotionally, well...I don't know.

[bettyandbob]

I think the key thing to understand is the overpayment was never the employee's money to begin with. It was an overpayment. It belongs to the employer. There may be state regarding how far back the employer can go to recoup an overpayment and that may limit what the employer can claim, but it was never the employee's money.

 

If it went on a significant amount of time, it would be reasonable for the employee to request a repayment plan set up so that he did not have to come up with all the money at once.

[Mergath]

So in this scenario, the employee received double pay every months for quite some time?  I would have said something as soon as I noticed it.

[UncleEJ]

I am responsible for payroll at my dh's company. If this had happened to me, I would assume that the employer and employee were jointly responsible, and would come to some compromise with the employee to resolve it. The employee would still need to repay the entire amount, imho, but we would have a generous payback time.

 

Anne

At first they wanted about 85% returned right away (not possible). They later agreed to a much more generous payback schedule.

[Alte Veste Academy]

Say you started a new job. You negotiated a salary of X per month. You get paid on the 1st and the 15th of each month. You are expecting to receive 1/2 of X at each pay check. When you receive your first pay check (direct deposit, pay stub only accessible through an external website) and it is the full amount of X, not half. You think hmm, maybe I misunderstood, there was a lot discussed during that first meeting. You don't really say anything, kind of forget about it and move on. Months later the company finally notices the discrepancy and wants all the money back that was overpaid.

 

See, the bolded is my issue. It was noticed and ignored. Wishful thinking? "Think" or hope?

[UncleEJ]

Did the employee sign a contract agreeing to the salary?

Yes.

[Danestress]

I think the employee need to repay. As an employer, this would seriously impact my trust in the employee if he or she tried to weasel out of it.

[City Mouse]

I don't know that "fault" is really an issue. There was a mistake and the employee was over paid. The employee knew but didn't not say anything at the time. The error was discovered at a later time by the company. The employee is not entitled to keep the money that was given by mistake.

Yes, it would be nice if the employer was willing to work out some arrangement to make deductions over time rather than take it all out of one paycheck, but the employee should not have spent money that they knew was not theirs.

[happi duck]

Payroll should have a way to fix it. If the employee pays it back out of pocket the taxes etc will be messed up.

[UncleEJ]

It's definitely the employer's fault.

 

I just don't know what should be done at this point. It seems very unfair to expect immediate repayment.

This is how feel too. Like, who was writing these checks and approving them. And this employee wasn't the only one within the company to be overpaid.

 

But I also realize that this money was not earned. Ugh.

[hjffkj]

Legally,  the employee has to pay back the employer no matter who was responsible for the mistake.

[mytwomonkeys]

I would *think* the employer is in the right. Not the employee.

[Cindy in FL.]

I'm sorry that you are in this situation, but agree that the money should be returned. I am glad that they are willing to work with you on the pay back.

[UncleEJ]

See, the bolded is my issue. It was noticed and ignored. Wishful thinking? "Think" or hope?

I see exactly what you mean. It was a bad call.

[zoobie]

It's governed by state law (with federal limits too). http://info.bna.com/apa/document.aspx?ID=195525

 

Your state's Department of Labor website likely has the details listed. In some states the employer has only until the next check to find the error and set up an overpayment deduction schedule. Each state spells out the maximum percentage a check may be deducted for recouping overpayment, if allowed at all by law.

[bettyandbob]

This is similar to (but not the same as) a situation when a bank accidentally credits an account for more than it should. Do  you get to spend the money? No. The next time the bank does an audit do they have the right to take the money out? yes. If you close your account before they notice do they have the right to come after you? Yes.

 

The employment contract stated a certain salary and the employer's accounting department overpaid. When they audit themselves they have a right to get the money back.

 

If you leave your basketball at the park, does that mean the kid who found it gets to honestly say it's his. You might have trouble proving the ball belongs to you (hopefully you wrote your name on it). Here, the employer "found" where he left the money, he has an audit trail to prove it's his money. So, the money needs to be returned.

[UncleEJ]

Payroll should have a way to fix it. If the employee pays it back out of pocket the taxes etc will be messed up.

They have set up a repayment plan that comes out of current paychecks.

[Lanny]

If the employee does not pay back the $, two (2) things might happen:  Loss of job and Embezzelment charges  

 

Once, when I lived in Texas, my bank credited a deposit for USD$10K to my account, by mistake. As soon as I saw that on my bank statement, I notified the bank about the error and they removed the $ from my account.

 

Usually, in my experience, my first paychecks were much *lower* than what I expected.

 

This employee should, IMHO, approach the employer, about a payment plan to repay the money owed to the employer. 

 

Who is more responsible for the problem, as the title reads, does not matter. The employee must repay the money.

[GSOchristie]

Yes.

 

Then yes, sorry, employees fault for sure.  If the employee had the salary in writing an knew that they were being overpaid, they should have said something.  This takes it from a misunderstanding to a lear knowing what you should be paid, IMHO.

[Dandelion]

Both employer and employee are responsible.  However, the employee had an opportunity to correct the error and chose not to do so.  

 

If the overpayment were just a small amount, I could give the employee the benefit of the doubt that he/she thought the payments were correct.  But in this case, the employee clearly knew he/she was being paid double the agreed-upon salary. There's just no way to let the employee off the hook here.  If I were the employer in this scenario, I would have serious misgivings about this employee's honesty and trustworthiness. 

 

The employee needs to pay the money back as quickly as possible.  

[UncleEJ]

Are we talking about a lot of money?

 

You don't have to say how much. As the employer I'd probably let it go if I could. They might not be able to though.

It is pretty significant. If I were the employer I would have a hard time letting it go. But at the same time I would be looking at who is doing payroll (and maybe they are).

[Alte Veste Academy]

I see exactly what you mean. It was a bad call.

 

:grouphug:

[Murphy101]

Yes, employee was paid all of X again on the 15th. So double paid. Part of the reason it was not noticed is because employee is paid a salary of X, in addition to a daily bonus of Y for each day on a job site. So when pay checks came in it was easier to miss the overpayment of X if that makes sense.

Okay, that's very different then. You honestly didn't think you were getting double pay? You thought the 15th was your bonus pay and the other was your salary pay? Have they clearly laid out how much your bonus pay was and deducted that from the excess they paid you? Was it unreasonable for you to make that assumption? For example, if they laid out that your bonus pay was only 10% of your salary, then that's rather difficult to believe you thought it was just bonus pay.

 

I think this is the problem of no longer giving pay stubs. Unless there is a huge discrepancy a whole lot of screw ups tend to go unnoticed bc the employee often never sees anything but the bank amount deposited.

 

If your bonus pay was really close to your salary, then I think it's unfair of them to have expected you to notice it before they did. After all they are the ones writing the checks and doing the numbers, you just get the check on good faith that they are paying you the right amount.

 

How many months did it take them to catch the error? 3? 10? For 3, it would be simpler to just adjust your paychecks for the next 9 months to the new amount of salary remaining to you. I would insist on it being in writing what amount they were planning to pay you and on what days.

 

Can you pay it back? Can you pay half of it back? Pending your answer to some of those questions, I might think you should pay it all back, half or none. Either way, I'd submit a formal complaint about payroll to HR bc someone there needs fired. That's a huge financial screw up that you have to deal with bc of them. We tend to greatly dislike working for people who are incompetent at paying us.

[UncleEJ]

If the employee does not pay back the $, two (2) things might happen: Loss of job and Embezzelment charges

 

Once, when I lived in Texas, my bank credited a deposit for USD$10K to my account, by mistake. As soon as I saw that on my bank statement, I notified the bank about the error and they removed the $ from my account.

 

Usually, in my experience, my first paychecks were much *lower* than what I expected.

 

This employee should, IMHO, approach the employer, about a payment plan to repay the money owed to the employer.

 

Who is more responsible for the problem, as the title reads, does not matter. The employee must repay the money.

To be sure, the money is being repaid.

[QueenCat]

If one didn't think one was supposed to get paid a higher sum, why would one spend the money before clarifying? Every time dh's checks are a little off, we check to find out why. Even if it's only a small amount.

[UncleEJ]

Okay, that's very different then. You honestly didn't think you were getting double pay? You thought the 15th was your bonus pay and the other was your salary pay? Have they clearly laid out how much your bonus pay was and deducted that from the excess they paid you? Was it unreasonable for you to make that assumption? For example, if they laid out that your bonus pay was only 10% of your salary, then that's rather difficult to believe you thought it was just bonus pay.

 

I think this is the problem of no longer giving pay stubs. Unless there is a huge discrepancy a whole lot of screw ups tend to go unnoticed bc the employee often never sees anything but the bank amount deposited.

 

If your bonus pay was really close to your salary, then I think it's unfair of them to have expected you to notice it before they did. After all they are the ones writing the checks and doing the numbers, you just get the check on good faith that they are paying you the right amount.

 

How many months did it take them to catch the error? 3? 10? For 3, it would be simpler to just adjust your paychecks for the next 9 months to the new amount of salary remaining to you. I would insist on it being in writing what amount they were planning to pay you and on what days.

 

Can you pay it back? Can you pay half of it back? Pending your answer to some of those questions, I might think you should pay it all back, half or none. Either way, I'd submit a formal complaint about payroll to HR bc someone there needs fired. That's a huge financial screw up that you have to deal with bc of them. We tend to greatly dislike working for people who are incompetent at paying us.

What we honestly thought was that he misunderstood the original salary amount. He did sign a contract, but our mistake is that we never dug it out to compare. The salary amount is relatively low as the money to be made is in the daily bonuses. Sort like a waitress makes a low hourly and hopefully makes a lot in tips.

 

I really wish they would mail out a pay stub.

 

It was about 4 months before it was caught.

 

The fact that he was not the only one over paid makes me really wonder about the accounting and payroll department. They also did not deduct out health insurance correctly. And we are now responsible for repaying that as well. It is also not a very big company, maybe 40 or so employees, so I would think whoever signed off on payroll should have noticed (as well as us!).

 

We are repaying them, just frustrated with the whole thing.

[UncleEJ]

If one didn't think one was supposed to get paid a higher sum, why would one spend the money before clarifying? Every time dh's checks are a little off, we check to find out why. Even if it's only a small amount.

We will from now on!

[mytwomonkeys]

What we honestly thought was that he misunderstood the original salary amount. He did sign a contract, but our mistake is that we never dug it out to compare. The salary amount is relatively low as the money to be made is in the daily bonuses. Sort like a waitress makes a low hourly and hopefully makes a lot in tips.

 

I really wish they would mail out a pay stub.

 

It was about 4 months before it was caught.

 

The fact that he was not the only one over paid makes me really wonder about the accounting and payroll department. They also did not deduct out health insurance correctly. And we are now responsible for repaying that as well. It is also not a very big company, maybe 40 or so employees, so I would think whoever signed off on payroll should have noticed (as well as us!).

 

We are repaying them, just frustrated with the whole thing.

That does sound frustrating. I'm sorry that happened!! Hugs

[vonfirmath]

dammim: I also work for a small company (~!00 people). But your experience explains to me why, even though my $$ is direct deposited, I get a paper paystub every week. Now, do I open the envelope right away? No. I need to correct that.

[GSOchristie]

What we honestly thought was that he misunderstood the original salary amount. He did sign a contract, but our mistake is that we never dug it out to compare. The salary amount is relatively low as the money to be made is in the daily bonuses. Sort like a waitress makes a low hourly and hopefully makes a lot in tips.

 

I really wish they would mail out a pay stub.

 

It was about 4 months before it was caught.

 

The fact that he was not the only one over paid makes me really wonder about the accounting and payroll department. They also did not deduct out health insurance correctly. And we are now responsible for repaying that as well. It is also not a very big company, maybe 40 or so employees, so I would think whoever signed off on payroll should have noticed (as well as us!).

 

We are repaying them, just frustrated with the whole thing.

 

I'm sorry, that really does suck :(.  How will this affect your family finances?  I know that if we are expecting to get a certain amount and then it got cut quite a bit, that would be doubly frustrating.

 

Edited for grammar, I'm distracted by Sofia the First.

 

[Murphy101]

What we honestly thought was that he misunderstood the original salary amount. He did sign a contract, but our mistake is that we never dug it out to compare. The salary amount is relatively low as the money to be made is in the daily bonuses. Sort like a waitress makes a low hourly and hopefully makes a lot in tips.

I really wish they would mail out a pay stub.

It was about 4 months before it was caught.

The fact that he was not the only one over paid makes me really wonder about the accounting and payroll department. They also did not deduct out health insurance correctly. And we are now responsible for repaying that as well. It is also not a very big company, maybe 40 or so employees, so I would think whoever signed off on payroll should have noticed (as well as us!).

We are repaying them, just frustrated with the whole thing.

Time to find another job ASAP. In our experience, companies that screw up like that do not improve.

File a complaint, pay back as soon as you can and find another job as soon as you can.

When asked why, I'd tell them you work to make money and since they couldn't figure out how to pay you right, you don't feel valued at the company.

And yes, that's exactly why dh has left some contracts over the years. And it's exactly why those companies can't get contracts with others. Word got out among contractors and they won't work for them.

[kitten18]

What we honestly thought was that he misunderstood the original salary amount. He did sign a contract, but our mistake is that we never dug it out to compare. The salary amount is relatively low as the money to be made is in the daily bonuses. Sort like a waitress makes a low hourly and hopefully makes a lot in tips.

 

I really wish they would mail out a pay stub.

 

It was about 4 months before it was caught.

 

The fact that he was not the only one over paid makes me really wonder about the accounting and payroll department. They also did not deduct out health insurance correctly. And we are now responsible for repaying that as well. It is also not a very big company, maybe 40 or so employees, so I would think whoever signed off on payroll should have noticed (as well as us!).

 

We are repaying them, just frustrated with the whole thing.

:grouphug:

 

 

I would be a little worried about company stability if they're screwing up payroll that badly.  :001_unsure:

[AlmiraGulch]

It's the employer's error, but that doesn't mean the employee is entitled to retain any of the funds that were overpaid. If this is in the US, the employee must pay it back. There MAY be limits in the amount, and there may be limits in the amount the employer can require be repaid per pay period, particularly in California, Minnesota, South And North Dakota, all of which have very employee-friendly employment laws. The state Department of Labor should be the employee's next phone call to find out his/her rights and responsibilities.

[Hikin' Mama]

Have only read a handful of responses, so please disregard if this is a repeat.

 

The employee should have said something immediately upon noticing the discrepency. And since it was double the agreed upon amount, it wasn't too hard to notice.

 

My husband and I have a small business. I do the bookkeeping and payroll and can't imagine making an error like this, unless the wrong salary had been given to me by my husband. He hires, manages employees, and everything else except bookkeeping/paperwork. If I had a payroll person who did this, I would be looking into why it happened. I would also question the honesty of employees who knew what their salary was supposed to be, but said nothing for months. Integrity is doing the right thing when no one is watching.

[Mrs Mungo]

The employer has every right to the money overpaid. The employee needs to return the overpayment. The employee never earned the money. Even if the employer mistakenly overpaid that does not mean employer cannot get the money back. The money never belonged to the employee.

 

It doesn't matter who noticed first, except that the first to notice (employer or employee) should have sought to correct the error upon noticing it.

This is the truth from a legal standpoint. I can see feeling differently about it on an emotional level (especially as a young person), but this is the legal reality that has to be dealt with.

[Catwoman]

Say you started a new job. You negotiated a salary of X per month. You get paid on the 1st and the 15th of each month. You are expecting to receive 1/2 of X at each pay check. When you receive your first pay check (direct deposit, pay stub only accessible through an external website) and it is the full amount of X, not half. You think hmm, maybe I misunderstood, there was a lot discussed during that first meeting. You don't really say anything, kind of forget about it and move on. Months later the company finally notices the discrepancy and wants all the money back that was overpaid.

Who is more responsible?

Should the employee have noticed and said something?

Should the company have noticed?

Should the employee be responsible for repaying?

I am in the middle of similar situation and would like some input. I'll give more detail after I hear some thoughts. Thanks!

Why would there even be a question about responsibility? The employee clearly knew about the error and didn't report it. That was completely dishonest, and the employee should have to return the unearned money.

 

I'm sorry to sound so harsh, but the moment he suspected he was being overpaid, he should have checked his contract to verify the proper amount.

[Callie]

So in this scenario, the employee received double pay every months for quite some time?  I would have said something as soon as I noticed it.

I would have also spoke up about it immediately things like this always catch up with you.

[Jean in Newcastle]

At first they wanted about 85% returned right away (not possible). They later agreed to a much more generous payback schedule.

That's fair.

[Callie]

This is how feel too. Like, who was writing these checks and approving them. And this employee wasn't the only one within the company to be overpaid.

 

But I also realize that this money was not earned. Ugh.

But the employee had to know there was a mistake right?  Why didn't the employee double check with the employer?

[Ripley]

I recently retired from a company of 88,000 employees.  I was overpaid on a regular basis due to how they issued paychecks - the 1st paycheck of the month was based on anticipated hours, the 2nd paycheck of the month reconciled any issues with the paycheck going back 6 weeks (aka the previous month's 1st paycheck).  My particular position had flex hours, so for any given pay period an employee could work anywhere from zero hours to double time.

 

Every time I was overpaid, the full amount would be deducted from my next paycheck(s) until paid in full.  There was no reasonable pay back period. LOL

 

It was a headache keeping track of hours and trying to budget around such a chaotic pay schedule.  So I stopped trying.  It was my tax guy who realized I had been shorted almost $4000 over a year.  When I contacted the company, they said it would take eight weeks to process.  It took ten to get my check from them!

 

I think there's legal responsibility and ethical responsibility.  I think it's shared on both sides equally for my situation and also the OP's.