I Want my Money Back: A Primer on Recovering Inadvertent Overpayments
Inadvertently overpaying an employee is a common employer mistake that can be challenging to remedy.
Navigating the legal requirements and practical considerations related to recovering accidental overpayments can be daunting, particularly given the various state laws on the topic.
State Laws Implicated by Overpayment Recovery Deductions
In New York, for example, employers must comply with specific rules when attempting to recover inadvertent overpayments via wage deduction. New York restricts the timing, frequency, and amount of the deduction. While New York does not expressly require the impacted employee to provide written authorization of a deduction, state laws does mandate that the employer provide advance notice of the deduction and give the employee an opportunity to challenge the overpayment and terms of recovery, among other things.
Practical Considerations When Recovering Inadvertent Overpayments
When an inadvertent overpayment was made by direct deposit and is discovered quickly, the employer may be able to reverse the payment.
This document is designed for general information only. The information presented in this document should not be construed to be formal legal or tax advice nor the formation of a lawyer/client.
For further information please contact me at www.kmckernanlaw.com kevin@kmckernan.com or 718-317-5007.