Legal Question in Business Law in California

Overpayment of Salary

I accidentally and without my realizing it, received $3,000 excess pay over the last 6 months and my employer wants me to pay it back. Do I have to?


Asked on 10/16/07, 10:02 pm

5 Answers from Attorneys

Terry A. Nelson Nelson & Lawless

Re: Overpayment of Salary

Only if you want to avoid being fired, sued and/or criminally charged with theft.

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Answered on 10/17/07, 12:56 pm
Michael Meyer Law Ofc. Of Michael J. Meyer

Re: Overpayment of Salary

Yes. If the pay was geniunely in error, you must give it back.

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Answered on 10/16/07, 10:08 pm
Carl Starrett Law Offices of Carl H. Starrett II

Re: Overpayment of Salary

Yes. If you don't, your employer can sue you and perhaps terminate you.

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Answered on 10/16/07, 11:24 pm
Mitchell Roth MW Roth, Professional Law Corporation

Re: Overpayment of Salary

Yes.

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Answered on 10/16/07, 11:48 pm
Bryan Whipple Bryan R. R. Whipple, Attorney at Law

Re: Overpayment of Salary

The rule on refunding accidental overpayments on contracts (such as overpayment on an employment contract) is that the person who received the accidental overpayment must pay back the excess unless two conditions exist: (1) The overpaid person must have been genuinely unaware that he was getting too much. If he knew or should in the exercise of reason have known that the payment was excessive or even suspiciously high, the condition is not met; and (2) the overpaid person must have materially and detrimentally altered his position in reliance upon his belief that he was entitled to all of the payment.

Altering your position in reliance might mean taking early retirement because you genuinely thought you had $1 million in your IRA, when due to the employer's mistakes over the years you really only had $400k. It does not mean that you bet $3,000 at the track and lost.

These are tough conditions to meet, and in a paycheck kind of situation especially difficult because judges are inclined to assume that employees pay close attention to their paychecks. If you had been shorted $3,000, you'd sure as heck have noticed!

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Answered on 10/17/07, 12:42 am


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