Legal Question in Civil Litigation in Oklahoma

UNEARNED INCOME

a company that I was previously employed by called me and said they accidentally deposited eighty hours worth of pay in my checking account. What are my legal responsibilities?


Asked on 4/10/98, 2:04 pm

3 Answers from Attorneys

Thomas Kohn Lenrow, Kohn, Howard & Oliver

No work....No pay.

You have no right to this money and, if you do not return it voluntarily, the company will have a cause of action against you for its return.

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Answered on 4/29/98, 7:35 am
Barbara C. Johnson Law Office of Barbara C. Johnson

Is there obligation to clear up company's error?

My first reaction was "Let them prove it!" My second is, "You should cooperate," but to do that is going to require time on your part. Will they pay you for your time? Have they stated when they gave you thie "extra" money? Dates? Amount? Taxes, did they report to Uncle Sam that you earned that money? Did you pay texes -- federeal and state -- on that money? Is the company wiling to pay the cost of you filing amended returns? Social security? Did you pay SS tax on that money? I think when you add up all the past cost to you as a result of their error and when you add up all the future cost to you to correct their error, there is very little to argue about.

Also, who called you? Why was not this notice put in writing? I would WRITE their Chief Financial Officer and Pres and CEO informiong them of this unusual phonecall you received. Ask them to explain it. Don't bother itemize in dollrs all the costs to you; make only a general statement of what costs you have had and will have as a result of their error. Suggest that they write their error off as a cost of their doing business. 80 hours. Give me a break. Even their in-house lawyer isn't going to sue you over that. IT WAS THEIR MISTAKE!

of their error

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Answered on 4/29/98, 12:32 pm

WAIT!! Think before you leap, here.

Presumably while they paid you the net, they set aside or have even already deposited the taxes-withheld portion of your gross pay with the tax authorities, to be credited to you on your tax return. That doesn't hurt you and actually helps you if they don't correct that.BUT you might want to check first that their payroll doesn't also tell the authorities that you were paid the gross amount of your paycheck, IF you normally underwithhold. I'll come back to that in a second. How to be certain? First, have them cook up your 1998 tax reporting thing "now" if they can (well, as soon as they want to get around to it) and you promise that you'll send them the money back when you get that. (If they wait until the end of the year, it's okay, you still send them back the net paycheck.) That's using your leverage to make sure you don't get embroiled in some administrative nightmare trying to get a corrected form out of them next January. This, however, may not be possible this early. In that case, have them write and sign for you a letter explaining what happened and listing your actual total gross to date without the check which is in dispute; when you get that letter, send them back the amount they gave you.

If you tend to overwithhold (you don't claim enough deductions or your W-9, or you end up having periods of unemployment this year, or you get paid at a lower rate throughout the rest of the year --> so that your annual income is less than 52 weeks pay at their rate would have been), THEN it'd be in your favor for them to have both withheld and deposited taxes for you and to have overreported your gross income by one pay period, even if you give back the net. However, that isn't technically legal under IRS rules, even though it may be the administratively simpler way to leave it, because their payment of your taxes via deposit of withholdings is actually income to you, to the extent that they overwithheld. As an attorney, I am required to advise against bending the rules this way.

However, be aware that I'm not YOUR attorney.

This message is provided to assist you in structuring your thoughtswhen you speak with an attorney about your situation. I am not yourattorney, and you are not my client, so this is not legal advice. Legaladvice can only be given after a careful interview of the client by theattorney, and I have not had the opportunity to understand thesignificant issues that I must understand to render legal advice. Youshould contact an attorney in your state to discuss your situation. Thatattorney can give you the advice that your situation deserves, aftercarefully considering the issues that are legally significant in yoursituation.

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Answered on 4/29/98, 1:11 pm


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