Overpayment by Ex-Employer

[ColdoRS]

My girlfriend has recently changed jobs.

She submitted and worked her notice in full, leaving her old job. She then had a couple of months pay which she wasn't expecting, she thought everything was up to date, so in order to cover herself, she called the company (big company) and explained the situation to someone in payroll, they assured her it all looks fine on the computer and that she will recieve another payment end of July and that will be everything squared off.

Ideal she thought.

Fast forward 2 months, shes happily in the new job with all going well and would you believe it... the previous company have written to her, telling her she owes them the last 3 payments they paid her. (This equates to approximately 3x her monthly salary in her current employment).

Now - we both agree she probably does owe them the money as it was all a bit messy and in truth neither of us fully understood how the company had worked out these payments, however, as mentioned she actively saught clarification in order to prevent exactly this issue and was assured it was all OK.

The reason it was so confusing was because the job involved working home and away, accrewing lots of days leave for days worked away and these days were paid at different rates. She was also due money from days she worked over her contracted days the previous year. How anyone can work it out 100% i do not know, but clearly now the computer has said no.

Anyway... If indeed the sum they have stated is correct, how should we go about repaying it? We have the sum available to pay back as one, however understandably would rather not if we can help it, this money has been earmarked for other things in the future. (Stage 2 map, GruppeM air intake, ring trip )

Can we 'hash out' a payment plan to make it a bit less painful?
Can we tell them to beat it, their mistake, we're off.
Do we ignore the letter?
Do we request a £ by £ breakdown of the sum, review it, agree it and just pay the money to put it all behind us?


TL;DR

- Girlfriend overpayed 3 months salary by previous company
- Had noticed at the time, contacted company and been told it's OK, she's due to be paid the money
- Company now come back 2 months after she's left and into new employment, asking for the money back
- Where do we stand, what should we do.

Edited by ColdoRS on Thursday 17th September 21:27

[Countdown]

You can do any of the 4 things you've suggested.

I would ask for a detailed breakdown and then offer a compromise payment.

[Mandat]

Imagine that the company has underpaid her and owed her 3 x months salary.

How would she like them to pay her what is owed? As quickly as possible and in 1 payment, or would she be happy to work out a repayment plan with them to pay over a prolonged period? Or would she be happy to write off the amount completely?

Once she has answered this question, she will know how she should respond to her ex-employer.

Edited by Mandat on Thursday 17th September 21:38

[anonymous-user]

Happened to me after I left a role. Was overpaid but never received a payslip and it was a bit awkward as on emergency tax so didn't register to me. 3 months later they informed me of the overpayment.

Yes you can work a plan out, you shouldn't pay interest. The law is very in favour off the employer, there is not many ways to get away with overpayment once you have been made aware. (I looked into it )
I just wrote a letter outlining my financial l commitments and how much I would pay back.

[Countdown]

I beg to differ.

It's not particularly easy for the employer to recover overpayment where

The employee wouldn't think they've been overpaid
A significant period of time has elapsed since the overpayment
The employee has obtained confirmation that the salary is correct

From memory I think the legal term is estoppel. The employee shouldn't suffer a detriment as a result of the errors/omissions of the employer.

[anonymous-user]

[quote=Countdown]I beg to differ.

quote]

Easy list a court case where overpayment hasn't been receoeed by employer once the eomployee has benen made aware of it. Like i said the cases go very much in favour onf the employer in recovering the overpayment, when employment contracts, terms etc are all there and valid.

''The bad news relates to an old legal doctrine called ‘estoppel’.

Under this, employees might be able to argue that they should not be required to repay any overpayments in the events the employer has done something to indicate the money was paid correctly, the overpayment was not their fault, and they have subsequently spent the money to the extent they can’t afford to repay it.''

I am not sure how estoppel could be used in this case? i can see it being used for 'dole dosser' or a insalubrious character .

Edited by The Spruce goose on Thursday 17th September 21:55

[98elise]

Mandat said:

Imagine that the company has underpaid her and owed her 3 x months salary.

How would she like them to pay her what is owed? As quickly as possible and in 1 payment, or would she be happy to work out a repayment plan with them to pay over a prolonged period? Or would she be happy to write off the amount completely?

Once she has answered this question, she will know how she should respond to her ex-employer.

Edited by Mandat on Thursday 17th September 21:38

There is a big difference between an individuals finances, and a big companies finances. Its unlikely that a big company would struggle to pay salary it owed.

Also the company is at fault so it should be reasonable about the repayment process. That said if I was overpaid, i wouldn't spend the money.

[blindswelledrat]

I would do as suggested by someone else.
Tell them you have spent the money as they led you to believe it was owed but that you could scrape together half of it as full settlement.
I strongly suspect they would bite your hand off at that offer.
You might well be able to get away with all of it, but it might well drag on and you would always be worried about legal repercussions and may well have to pay it all back after loads of hassle.

[hornetrider]

blindswelledrat said:

I would do as suggested by someone else.
Tell them you have spent the money as they led you to believe it was owed but that you could scrape together half of it as full settlement.
I strongly suspect they would bite your hand off at that offer.
You might well be able to get away with all of it, but it might well drag on and you would always be worried about legal repercussions and may well have to pay it all back after loads of hassle.

There's no harm in trying this I suppose if one is of morally dubious disposition.

I would ask for a precise breakdown of the overpayments so you can double check them yourself, then suggest a payment schedule which doesn't inconvenience you, but is no longer than 3 months.

[blindswelledrat]

hornetrider said:

There's no harm in trying this I suppose if one is of morally dubious disposition..

I think that despite the puritanical responses to these kind of threads, we are all of a slightly morally dubious disposition and faced with an overpayment where a large company has paid you, put you through the inconvenience etc that you would do similar.
THink about it, when that letter came though you would be laying in a semi coma in your living room with the packaging of £4000 worth of pies scattered around you and you'd just about be able to raise your head to read the letter and say "ooops".

[oOTomOo]

Mandat said:

Imagine that the company has underpaid her and owed her 3 x months salary.

How would she like them to pay her what is owed?

I don't see how the company making a mistake with the OP OH being at a loss and the company making a mistake with the company being at a loss are equivalent scenarios...

[hornetrider]

I presume you are one of these types who would keep an overpayment if a cashier made a mistake with your change at Tesco.

[blindswelledrat]

hornetrider said:

I presume you are one of these types who would keep an overpayment if a cashier made a mistake with your change at Tesco.

No. Completely arbitrarily that is above my threshold.
We all have a moral threshold set at different levels and I don't believe you are a puritan.
If I thought British Gas had undercharged me by £50 I would not tell them.
If I saw a person in the street drop £10 I would give it to them immediately.

In the case in point I am advocating an agreement, not doing anything illegal. The op has been inconvenienced. In return for their cooperation they are asking for a discount. There is nothing underhand there, in my opinion.

[Countdown]

The Spruce goose said:

Countdown said:

I beg to differ.

Easy list a court case where overpayment hasn't been receoeed by employer once the eomployee has benen made aware of it.

It's hard to do so (partly because I have no idea where such cases are recorded) but mainly because Employers won't pursue recovery unless it's value for money. they will simply write it off if it's uneconomic to pursue

The Spruce goose said:

Like i said the cases go very much in favour onf the employer in recovering the overpayment, when employment contracts, terms etc are all there and valid.

You'll be surprised how often employment contracts DON'T include clauses relating to overpayment recovery. Normally when the boss's wife "does HR" and all the contracts are based on a template from Google. Even if you have watertight contracts recovery isn't guaranteed. For example, in the OP's case, his partner has received assurances that the pay is correct. This would count against the employer if/when he instigated court action

The Spruce goose said:

''The bad news relates to an old legal doctrine called ‘estoppel’.

Under this, employees might be able to argue that they should not be required to repay any overpayments in the events the employer has done something to indicate the money was paid correctly, the overpayment was not their fault, and they have subsequently spent the money to the extent they can’t afford to repay it.''

I am not sure how estoppel could be used in this case?

Edited by The Spruce goose on Thursday 17th September 21:55

It applies because (a) the employer HAS done something to indicate the money was paid correctly and (b) it wasn't the employee's fault

[Countdown]

Mandat said:

Imagine that the company has underpaid her and owed her 3 x months salary.

How would she like them to pay her what is owed? As quickly as possible and in 1 payment, or would she be happy to work out a repayment plan with them to pay over a prolonged period? Or would she be happy to write off the amount completely?

Once she has answered this question, she will know how she should respond to her ex-employer.

Edited by Mandat on Thursday 17th September 21:38

if the company have checked with her that she's been paid correctly, and she's confirmed that she's been paid correctly, I think she'd be on a sticky wicket then going back to them 3 months later to tell them she's been underpaid.

[Greshamst]

One thing you need to keep an eye on is tax...

This happened to me 2013/14, and come 2014/15 tax year, i've got a lower tax code in order for HMRC to recoup tax from where I got paid twice in one month.

I handed the overpayment back to my employer, they didn't notify HMRC that I had done so, now i've got to try and sort it out with countless calls to HMRC.

And thinking about it hurts my head.

[Jasandjules]

I would offer them a repayment plan (once they have provided full details of the actual amounts overpaid and a breakdown to make it clear) - I would suggest that is reasonable given she confirmed that the sums paid were owed.

[andy-xr]

A company I used to work for had a 'True-up' commission structure. They'd pay commissions at the first month of a quarter for the previous quarters activity, but in the 2 inbetween months you'd get 60% of your commission paid, and then a true up in the first month of the quarter

The idea was, you'd never be below 60% of your target so you'd get a bit of a touch one month in 3 with the other's being average.

In 2008 the banks fell over and so did half the economy. We did 54% of our number in Q1/09, a figure based on 22% YoY growth when everything went backwards by about 30%. Upshot; we owed the company money paid to us. I just told them I'd already spent it, couldnt give it them back if I wanted to. There was a lot of grumbling, the structures and targets changed but they lived through it.

I think in the OPs shoes I'd try the same tack, bat it back over to them that it's already been paid and allocated. Sorry.

Then see what they come back with if anything

[anonymous-user]

Countdown said:

I beg to differ.

It's not particularly easy for the employer to recover overpayment where

The employee wouldn't think they've been overpaid
A significant period of time has elapsed since the overpayment
The employee has obtained confirmation that the salary is correct

From memory I think the legal term is estoppel. The employee shouldn't suffer a detriment as a result of the errors/omissions of the employer.

Your understanding of the principles of estoppel is incorrect. There is no estoppel here. On the contrary, the employer has the right to recover the payment under the law of restitution. There is no change of position or detriment defence because the employee either knew of the overpayment or in any event has not changed position, as the money is still available. A friendly suggestion: if you are ill informed on a subject, it is a good idea not to offer opinions about it.

OP, pay up. asap. The fact that you even thought of keeping the money or delaying repayment does not say much for your integrity.

Edited by anonymous-user on Saturday 19th September 18:23

[Cyberprog]

I think legally, if the money was not owed to your GF, then she should pay it back. But that's not to say it's not worth punting it back to them saying that she had been told the payments were correct. And of course, making an offer to pay back 50% in light of that if they pushed further. But be prepared to have to repay it, though they should be amenable to a payment plan if you need it...