Legal Question in Employment Law in California

This is a "good news, bad news" situation. You are indeed liable to repay the money back to your employer -- your employer can even sue you for what it is owed. Your employer, however, may NOT unilaterally suspend your pay checks in order to recoup the amount of the alleged debt. Your employer thus must pay you for time you work this summer, despite the overpayment.

It is lawful for you and your employer to work out a re-payment plan for the overpayment. That plan should be put in writing.

Employer can't do this. You must be paid between now and August your regular rate. However, somehow your employer needs to be paid back for the mistake. This means you need to work out a plan with your employer to pay the money back. That does NOT mean that your payments between now and August can be garnished wages.