Been Overpaid - Now they want it back

[hast2]

Hi, I'm hoping someone might have had some experience of this and give me a bit of a steer on how to best proceed with this.

I've just been told by my employer that they have been overpaying me for the past 7 months, (including my yearly bonus) and now they want the 4 figure sum back.

This all appears to have happened when I took on a new role, within the company, that paid slightly less money. (my choice as I didn't enjoy the previous role) I remember checking my wages via my bank statement and seeing the change in amount, but now that all this has come to light and I've gone in and looked at my online wage slips, it appears that that change was because they messed up my pension contributions (checking all my payslips shows this to have been corrected now)

It appears that when I changed role they never actually changed my wages.

Can they just take it back? their suggesting over about 3 months.

[hast2]

Thanks folks for the feedback.

I get that it's their money and to degree that they are entitled to it back, but they way they are handling it isn't sitting very well with me.

The reason I wasn't enjoying my last role and decided to move posts was because of mistakes and the poor performance of others around me that was never being dealt with, but I was getting dragged into, causing me untold amounts of hassle and making me look bad. Therefore the pay cut to start with isn't sitting very well with me (although it was my choice to escape a bad situation)

I've had issues with pay before, and had to fight with them on a weekly basis for several months to get it corrected - now it feels like because they have messed up, I'm just supposed to be pushed about and do as I'm told.

When I first got told their was a problem it was 5 minutes before the end of the week, and the following week all the managers that could deal with it were on holiday. I got the feeling, from the way the conversation went, they had known about it for several days. They only told me at the last minute because they knew I wouldn't be happy and put up some resistance.

[hast2]

The Leaper said:

The law is pretty clear on this type of error.

1. You are not entitled to keep the proceeds of the error
2. Your employer is entitled to recover their overpayment from you.
3. It is reasonable for the repayment period to be the same as the period that the overpayments were made. So, in your case it seems that the repayment period should be 7 months.
4. Your employer is not entitled to automatically deduct their overpayments from your pay. They must obtain your written agreement to do so. Ideally, you need to sign a formal agreement with your employer.
5. If you have suffered distress and inconvenience as a result of your employer's maladministration you are entitled to seek financial compensation from them to them your D & I.

There is also the matter of your inco0me tax being over paid and the need to adjust this retrospectively. As the overpayments probably involve the two tax years 2016/7 and 2017/8 the problem is a bit complex. I would expect your employer to deal with HMRC and get your tax affairs put right promptly .

R.

Thanks for the input.

I genuinely didn't know I had been overpaid. When I changed jobs I looked for the drop in pay on my bank statement and sure enough I had a drop in wages from the previous month. Now going back over it all, it appears that the difference was because my pension contributions had been all cocked up and then extra taken to rectify it, hence the difference I seen.

I had thought about the tax implications and I think I'll get them to look into it before I agree to anything.

I know it's there money and they should get it back, but they've not exactly handled it well. You would expect a meeting along the lines of, we're very sorry, can we work together to resolve this. Not - Hast2, we didn't adjust your wages when you changed positions last year and we're going to take it back, if you have any questions they'll be no one here to discuss it (last bit was implied, by the fact the all left on business trips or holiday, not actually said)

Would love to just up and leave, but I'm in a specialist job and the market around here is also pretty slow at the moment so a career change isn't an option either.

[hast2]

craigjm said:

I had thought about the tax implications and I think I'll get them to look into it before I agree to anything.

Assuming you are paid through the main payroll and PAYE then the tax situation will resolve itself as the deductions will be done pre-tax

I need to look at it in more detail, because it's split across 2 tax years, what if it has put me into different tax brackets, and I've been over paid at the upper tax rate, but pay it back at the lower tax rate, I'll be refunded less tax? Is that correct?

[hast2]

Breadvan72 said:

OP, if you have significantly changed you position by, for example, spending the extra money on a holiday, you could properly resist repayment. There is what is known as a change of position defence to a claim for restitution of money paid by mistake. This defence will only succeed when it would be unjust for you to have to repay the money. Unjust means something more than inconvenient. In most cases of overpayment of an employee, the employee must repay the amount paid in error, but there are exceptions based on individual circumstances.

Negotiate.

Thanks, I know they need to have the money back, it's just the way they are going about, along with their lack of apology, not really giving any details on why it happened, and appearing uncooperative on how it'll be paid back, is all getting my back up a little bit and making me want to dig my heals in.

I'll send a e-mail to my manager today expressing my displeasure at the situation and that I would like more information, and for them to work out and explain to me the tax implications since it's split across 2 tax years.

For those that are calling me crazy - I'm a salary employee, I have no need to check my wage slip every month, as long as what goes into my bank account is the same as last month all is good in the world. (we have online payslips and the system is very slow and not very user friendly) I watched my bank account for a change and it appeared (admittedly a month late, but that wasn't a surprise as they normally mess stuff up). couple months after that my wages looked irregular, and then I logged into my payslips and noticed the pension stuff, I worked out all the pension stuff and seen that they had corrected their error - what I didn't notice at that time was my wages hadn't changed, as I was only looking at the pension section (my mistake I didn't put 2 and 2 together, but it was over 4 month period, and I'm not in the habit of adding up my wages to make sure my monthly wage is equal to my salary). Anyway, next few months my wages are all over the place again due to year end bonus, and then yearly wage increase which was back dated (it went through 2 months late for the entire company) And then we are at the point I find out about the error.

Hope that helps all the righteous folk that think I'm crazy.

[hast2]

Eric Mc said:

hast2 said:

For those that are calling me crazy - I'm a salary employee, I have no need to check my wage slip every month,

I find that attitude amazing and rather shocking, to be honest. EVERYBODY has a duty, no matter what their status is, to monitor their financial situation. Ignorance should never be a defence - especially if it's wilfull ignorance.

Do my employers have a duty to, not only me, but also the shareholders (for example over paying), to ensure they pay the correct amount to employees.

You quickly get a feel in this thread who are employers and who are employees

[hast2]

Wondering if someone I the know could let me know what carries more weight - my contract of employment or law?

I know now, that legally my company can take the money back, however my contract of employment mentions a long list of reasons why they'll take money out my wages, and over payments isn't on the list.

It says - The company reserve the right to make deductions from pay under the following circumstances : lateness, absence, loss of company tools, arrestment by court order. No other deductions will be made without the employees written authority.

Thanks to those for their helpful comments so far (especially Breadvan).

I have sent my manager a polite email pointing out that I'm disappointed in the situation, explained the unexpected financial strain this will put me under, and could they reconsider their position. I've also asked them to look into the Tax and NI stuff and explain the repercussions to me since it'll be across 2 tax years.

[hast2]

Well a quick update.

As I said before, I sent a polite e-mail, but no one has spoken to me about any of the stuff yet. What they did do is take 25% of the money they have overpaid back on this months wages. Just think it might be nice if they discussed it, even to explain that legally they are in the right and they can do what they want. (I know folk on here have told me they can legally take the money, but they don't know that)

[hast2]

craigjm said:

Breadvan72 said:

Raise a grievance. Assert that the employer is acting in a manner that breaches the obligation of trust and confidence.

This immediately.

Sorry, but you've lost me a little bit with this. What grounds would I have for raising a grievance if they are legal entitled to take the money back? And what would it achieve?

FYI - They've still never replied to any of my emails, not even to acknowledge receipt and to say they are looking in to it.

[hast2]

Breadvan72 said:

Your employer is obliged to act in a manner that maintains trust and confidence. Taking the money in large chunks, rather than spread out over many months, arguably breaches this obligation. It places you under needless financial pressure. There should be a discussion, and an agreed payment plan.

Your grievance could be based on lack of reasonable discussion and the taking of an unfairly large chunk.

IF you can also argue that you changed your position when you were overpaid, by for example taking a holiday that you would not otherwise have taken, then you may not have to repay the money anyway. That one is a long shot, but a grievance based on lack of discussion and unduly large deductions might succeed.

Success would be a longer time to pay, or even a waiver of all or part of the repayment.

If the employer continues to mishandle this, and if you have at least two years continuity of employment, then you might obtain grounds to assert constructive dismissal. But there are big "ifs" there, and I am far from encouraging you to take that course.

Also, only take that course if you want to leave, and you have another job to go to.

Edited by Breadvan72 on Thursday 1st June 08:23

I'll try and find time today to dig out the employee handbook and familiarises myself with our grievance procedure, my workload is pretty high at the moment and I don't want to give my boss an excuse to give me hassle by not being up to date with stuff. If I've not heard anything formal back by the end of the week I'll start a grievance on Monday in accordance with our procedures.

Thanks

[hast2]

AndrewEH1 said:

Is there a union in your workplace?

No.

[hast2]

Breadvan72 said:

All you need to start a grievance is the following -

Dear [ ]

I would like to raise a grievance about the handling of an overpaymant of my salary.

The facts are these: From xxxx to yyyy the company erroneously paid me £NNN per month too much. I was not aware of this error until zzzz. The company has asked for the overpayment to be refunded by me, but has not engaged in reasonable discussions about repayment, and especially about the time for repayment. I have attempted on several occasions to discuss the matter, but the company has not engaged in discussion. I attach the relevant emails to this letter.

My most recent salary payment has had an amount equal to one quarter of the amount claimed by the company. This has place me in financial difficulty. It is not fair that I should have to suffer this difficulty because of the company's mistake. I have been legally advised that the company is not acting in a manner that is fair, reasonable and consistent with its obligation to maintain trust and confidence.

I therefore wish to invoke the grievance procedure. I am looking for, at the very least, a reasonable payment schedule. But before that can be agreed, the whole issue of the amount of repayment should please be discussed. This letter has been written with the benefit of legal advice. I reserve all of my rights. I await hearing from you as soon as possible.

Yours sincerely

Thank you very much Breadvan72, that's more than generous of you to provide this.

[hast2]

Antony Moxey said:

If I may, might there be a couple of errors in that?
"I would like to raise a grievance about the handling of an overpaymant of my salary." 'Overpaymant' should be 'overpayment'
"My most recent salary payment has had an amount equal to one quarter of the amount claimed by the company." Should 'claimed' be 'reclaimed'?
"This has place me in financial difficulty." Should 'place' be 'placed'?

Forgive me if you think I'm being a bit harsh, but, Breadvan has kindly provide this information for FREE when he has no obligation to do so. This is his day job, and providing this sort of stuff for FREE is like having a plumber come round and fix a leaky pipe for nothing. I don't think nit picking over minor grammatical errors is polite under the circumstances.

I've not double checked to see who's version would be grammatically correct, neither do I care.

[hast2]

Update........

Not heard a peep on the subject since I sent my e-mail on Monday expressing my disappointment that they had taken the money from my wages and that I wanted to discuss it further.

Going to head down the grievance route as suggested by Breadvan and others. I guess if nothing else it'll make next week a bit more interesting.

It's surprising how stressful it is having to fight with folk over simple stuff - all I want is to have a civil and informed conversation about what has happened, the tax implications and some sort of discussion on how best to resolve the problem.

[hast2]

Breadvan72 said:

When money is paid by A to B by mistake, A has what is called a restitutionary claim for repayment of the money. B has been, in the language of the law of restitution, "unjustly enriched". The claim can be defeated if B changes his or her position on receipt of the money in such a way as to make an obligation to repay unfair.

Examples:

1. A pays B 20K by mistake. B uses the 20K to buy a car. No change of position. The car can be sold. B must repay 20K.

2. A pays B 20 K by mistake. B spends the money on school fees that would not otherwise have been incurred. Change of position. The money spent cannot be recovered or its value realised in cash. B need not repay 20K.

Thanks for that example, I hadn't appreciated that their would be a difference between spending the money on possessions and services.

I'll be sure to keep that in mind when phrasing things while I haggle my position.

[hast2]

Well I finally got an official response from the company on my overpayments.

It's a 5 page letter that pretty much goes into great detail on who said what at the meeting and how that comments have influenced the decision.

The edited version of the letter is that I've either lied and knew about it and it's therefore my problem, or I should have checked my payslips and therefore still my fault.

(going on some of the comments on this thread plenty will agree with their decision)