Legal question re Payroll (1 Viewer)

[Paul D G]

So, my wife recently cut her hours down at her job. She is paid twice a month (15th and 30th) rather than bi weekly.


While the hours and all is reflected correctly on her paycheck, she is still getting paid the same amount as she was before cutting her hours.


For example, to calculate her wage they figure:

40hrs * 52 wks / 24 pay periods * $30@hr pay = $2600 a check (before taxes and all that crap)


She cut her hours down to 32 hrs. Her paycheck shows this, but the dollar amount is still $2600 rather than $2080.


She has tried to report this to her company but everyone insists she is wrong and her wages are correct.


We're not sure what we should do about this. She's making a more than reasonable effort to correct this but they aren't listening. She can't really just send the money back because taxes and 401k and all is taken out of it so she'd be overpaying her taxes. We're concerned that in six months time they'll realize the mistake and we'll get hit with owing them $4000 or something ridiculous. I'm telling her if this keeps going we should take the overage and stick it in a separate account for when they do claim it.


But what are her legal rights. How long can this go on before it's not her problem anymore. It's not like she's keeping it secret - she's trying to pay it back but they won't let her. She has to have some sort of legal rights in this. I mean, can they really come back at us some time down the line and say "Oh, we made a mistake, we overpaid you $10k and we want it back now."

 

[nolesrule]

IANAL


It'd probably be a good idea to consult with an attorney familiar with labor laws in your state when asking about legal rights, rather than trying to get advice here.


Whatever you do, don't spend the money. When they finally get around to fixing it, they may ask for it back lump sum or they might take it out of future paychecks.


Still, she needs to document all conversations she is having, because there's also the possibility they'll request interest, and she can then be able to show that she's been trying to correct the problem all along.



Finally, are you sure she's not technically a salaried employee and that they allowed her to reduce her hours without a reduction in pay?

 

[Paul D G]

I'm just looking for general advice/thoughts right now. She's still trying to get them to understand.


She's retaining all her emails and replies. She's never been salaried and, the odd thing is, it was okay for awhile, then all of a sudden her checks jumped back to what they were before her reduced hours.

 

[Al.Anderson]

I have no experience in this area, so take that this for what it's worth, but (1) If they ever want it back I would be surprised if they could collect interest on their mistake; (2) If she's exempt/salaried, it may be that 32 hours is over the level defined as full time. So, they have to pay her the full amount by law, and they are just being nice guys by letting her work less. On one occasion I ran out of vacation time before the end of the year, so I just booked 32 hours. They paid me for 40 and when I reported the error they said they had to pay me the full amount.

 

[Will_B]

I'm not a lawyer, but my layman impression is that an employer *can* indeed ask at *any time* for the overpayment to be returned, even years after she is no longer working there. (How many years? The number of years appears to vary by state, but bear in mind that period of limitation almost always begins to count up only after the most recent mistake was made, or, arguably, after her most recent paycheck even if her most paycheck is correct -- so the chances of "outrunning" this and being able to keep the money are slim! And if your state starts counting from the date of discovery (the employer's discovery) rather than the date of the last offense, your chances are closer to "none"!


Sounds like there are two usual ways that people pay employer overpayments back: Either in a lump sum, or, by arrangement to have the monies recovered from new paychecks by garnishing any portion above minimum wage. Frankly it would be less humiliating to get them to take the money back in a lump sum; getting a paycheck that is the same as a burger-flipper would be painful.

 

[CRyan]

This will be in your states statutes. Go to the .gov site and then locate the Labor and Industries division. It may be called something a little different. Either way search on the term "overpayment." Most states will regulate overpayments and how long the employer has to recoup those payments. That will at least give you an idea of what you are looking at.


Next. Email yourself all documentation regarding conversations (even if it just you writing and sending your own words). But really, if you have not already done so, she should email the HR department about this situation to get their response in writing. This is not only just good common sense, it will prove useful later if they try to recoup. The owner (or COO) of the company/division would likely let you keep the funds (without getting legal involved) once presented with a clear question to HR and a clear response stating it was your money.

 

[mattCR]

I think, in fact, they may be right. Let me put it this way: every other week is 26 pay periods. Twice a month is 24 pay periods. The difference in how much she makes vs. the new pay system will result in an extra 8 hour day (40 hours) every so often.. etc.. is it consistent and flat? IE, always the same, or have you had one or two checks that are over.. this would also occur if you make the switch from one to the other, as translated hours (ie, hours left over from older pay method) roll over... I would agree with the above, put it in writing that you have asked the question a few times.. and if they are insistent, but wrong, and you have it in writing, there is really nothing they can do about overpayment.

 

[Paul D G]

I first want to note that the specifics mentioned in my first post are simplified for ease of explanation. For example, she's actually down to 24hrs rather than 32.


The thing is, after reducing her hours, the first couple of checks were correct, then they were suddenly back at the amount she was receiving previously. And, from what I understand (i have not seen a pay stub as she started to get annoyed at all the questions I was throwing at her) her check shows her hourly wage, then in the next column the hours worked, and the third column shows the total earned. But when you actually do the math it doesn't add up. It's like someone overrode the formula in the field with a specific amount.


We'll see how it plays out over the next week or so as we try to get this sorted, then contact HR if it happens again. And I'll try to take a look at a few statements to make sure she really isn't missing something (but she is the financial brains in the family).