Overpaid wages

[kluged]

Hello, I am in a similar position having discovered the other day that I have been overpaid wages. Here is my situation:

 

I ended my most recent employment on 30th May and at the end of May received my P45 & final wage slip. I reviewed my wage slip and determined that I had not been paid for my accrued but not taken holiday pay.

 

I spoke to my boss who agreed to write me a cheque for the amount in question. However, I also agreed to work during June on an informal part-time basis to help train my replacement. I don't have any contract of employment covering this casual work and have done about 20 hours over the course of the month and so was expecting to be paid for this and my holiday pay in one go.

 

I am supposed to be meeting my former employer tomorrow to settle up how much I should be paid. Looking at my bank account today I have discovered that payroll have paid my normal monthly salary for June as if I were still working there. Our payroll processing is outsourced and handled by the local authority.

 

I have two questions:

 

1) As I am no longer employed by the organization the normal overpayment recovery process (ie, recovering from ongoing wages) will not be applicable. What I have found online implies that as I no longer work there my former employer would have to make a civil claim against me to recover the money overpaid and also that this is likely to fail unless my contract specified a clause regarding the repayment of overpaid wages after employment ended. Is this correct? (I have checked my contract and determined that there is no clause in it covering overpayment of wages in any case).

 

2) Assuming that I am legally able to keep this money, can I also insist on being paid for the work I have done in June separately? I would imagine that my former employer would most likely suggest that I pay them the difference between what I have been overpaid and what I have earned during the month. However, if the overpayment is non-recoverable then don't I have the right to be paid in full for the additional work?

 

I'd appreciate any advice you could give me.

[49scream]

Twoofus - the act actually states:

 

 

 

Sections 13 to 15 of the Employment Rights Act 1996, under the heading "Protection of Wages", provides the right not to suffer unauthorised deductions and the right not to have to make payments to the employer. Deductions and payments from wages are only lawful if

• they are required or authorised under a statutory provision, or
  
• they are required or authorised under a relevant provisions of the worker's contract, or
  
• the worker has previously agreed in writing to the making of the deduction.
  

Having defined the requirements for a deduction to be lawful, the Act then provides six exceptions from the rules, among which are

• the recovery of overpaid wages and business expenses, and
  
• a deduction that is made because a worker has taken part in a strike or other industrial action
  

Employers can seek to recover an overpayment through the courts. So Kluged please see my previous post to see if you have a defence. Whatever the position on the overpayment you still have a right to be paid for your latest work. What your payroll may do though is produce a payslip paying you and deducting the overpayment in one fell swoop. Be aware though that even the most recent work will accrue some small amount of holiday pay. It is also worth noting that if say your holiday year runs April to March any unused entitlement can't be carried forward automatically.

 

I hope this helps.

[memorymemory]

Hi. I wonder if anyone could help me? I work for a school and the wages and payroll is outsourced to a company. I received a letter this morning from a debt collection agency stating legal proceedings would be started if I did not settle the amount of £416 owing to the company who manage our payroll. The debt collection agency stated that the money is owed due to overpayment of wages. This is the first I have heard of it and if my wages have been overpaid, then not only has no one told me, but it cannot possibly be my error. It seems ridiculous that if I have been overpaid, that instead of communicating this with me, or deduction my future wages, they have passed the debt to a collection agency. Can this be correct?

[AaronM]

My post is taken directly from the governments website, it is the law. Your contract of employment needs to be looked at to see if they have specified a procedure on overpayments. Basically if it doesn't then they have no right without YOUR permission.

 

twoofus I would like to see whre on the government website it says this?!

 

Sorry to say but you are wrong, as per my previous post if it is in relation to an overpayment the employer can deduct the money WITHOUT the employees permission. 49 scream also has quoted the same as me which is correct.

 

memorymemory that does sound a bit rubbish. I would get in touch with the debt collecting agency and tell them its the first you have heard about it and you will contact the company, just so they can mark on their system. Then I would phone the payroll company and ask what the deduction is about!

[twoofus]

Aaronm,

 

Try looking on the governments website then!!!

 

From screams post:

Sections 13 to 15 of the Employment Rights Act 1996, under the heading "Protection of Wages", provides the right not to suffer unauthorised deductions and the right not to have to make payments to the employer. Deductions and payments from wages are only lawful if

• they are required or authorised under a statutory provision, or
  
• they are required or authorised under a relevant provisions of the worker's contract, or
  
• the worker has previously agreed in writing to the making of the deduction.
  

 

They can only deduct money from your wages IF YOU HAVE AGREED TO IT. They cannot do it without your permission, sorry i'll rephrase that, they can only do it and get away with it if you allow them to as it is unlawful unless you have agreed to them doing it.

 

There are no ifs or buts it is not allowed without agreement either personnally or within your contract.

[twoofus]

Look, the point is here that eventually they will recover overpayments but it must be by agreement unless your contract has provisions for them to do so OR you agree to let them personally.

 

MemoryMemory, are you a union member? If so contact your Unions free legal department immediately

[AaronM]

twoofus, keep reading;

 

 

Having defined the requirements for a deduction to be lawful, the Act then provides six exceptions from the rules, among which are

• the recovery of overpaid wages and business expenses, and
  
• a deduction that is made because a worker has taken part in a strike or other industrial action
  

A deduction is lawful and can be taken without consent if in relation to an overpayment.

 

Furthermore, copied from here; Pay deductions : Directgov - Employment

 

Rules for making deductions from your pay

 

Your employer is not allowed to make a deduction from your pay or wages unless:

 

• it is required or allowed by law, for example National Insurance, income tax or student loan repayments
  
• you agree in writing to a deduction
  
• your contract of employment says they can
  
• it is a result of any statutory disciplinary proceedings
  
• there is a statutory payment due to a public authority
  
• you have not worked due to taking part in a strike or industrial action
  
• it is to recover an earlier overpayment of wages or expenses
  
• it is a result of a court order or Employment Tribunal decision
  

I refer to you the second from last point which states 'Your employer is not allowed to make a deduction from your pay or wages unless it is to recover an earlier overpayment of wages or expenses'. Edited June 28, 2009 by AaronM

[pt2537]

guys forget the government websites etc.

 

Look at the law itself

 

Deductions by employer

13. Right not to suffer unauthorised deductions.

— (1) An employer shall not make a deduction from wages of a worker employed by him unless— (a)

the deduction is required or authorised to be made by virtue of a statutory provision or a relevant provision of the worker’s contract, or

 

(b)

the worker has previously signified in writing his agreement or consent to the making of the deduction.

 

 

(2) In this section “relevant provision”, in relation to a worker’s contract, means a provision of the contract comprised— (a)

in one or more written terms of the contract of which the employer has given the worker a copy on an occasion prior to the employer making the deduction in question, or

 

(b)

in one or more terms of the contract (whether express or implied and, if express, whether oral or in writing) the existence and effect, or combined effect, of which in relation to the worker the employer has notified to the worker in writing on such an occasion.

 

 

(3) Where the total amount of wages paid on any occasion by an employer to a worker employed by him is less than the total amount of the wages properly payable by him to the worker on that occasion (after deductions), the amount of the deficiency shall be treated for the purposes of this Part as a deduction made by the employer from the worker’s wages on that occasion.

(4) Subsection (3) does not apply in so far as the deficiency is attributable to an error of any description on the part of the employer affecting the computation by him of the gross amount of the wages properly payable by him to the worker on that occasion.

(5) For the purposes of this section a relevant provision of a worker’s contract having effect by virtue of a variation of the contract does not operate to authorise the making of a deduction on account of any conduct of the worker, or any other event occurring, before the variation took effect.

(6) For the purposes of this section an agreement or consent signified by a worker does not operate to authorise the making of a deduction on account of any conduct of the worker, or any other event occurring, before the agreement or consent was signified.

(7) This section does not affect any other statutory provision by virtue of which a sum payable to a worker by his employer but not constituting “wages” within the meaning of this Part is not to be subject to a deduction at the instance of the employer.

14. Excepted deductions.

— (1) Section 13 does not apply to a deduction from a worker’s wages made by his employer where the purpose of the deduction is the reimbursement of the employer in respect of— (a)

an overpayment of wages, or

 

(b)

an overpayment in respect of expenses incurred by the worker in carrying out his employment,

 

 

made (for any reason) by the employer to the worker.

(2) Section 13 does not apply to a deduction from a worker’s wages made by his employer in consequence of any disciplinary proceedings if those proceedings were held by virtue of a statutory provision.

(3) Section 13 does not apply to a deduction from a worker’s wages made by his employer in pursuance of a requirement imposed on the employer by a statutory provision to deduct and pay over to a public authority amounts determined by that authority as being due to it from the worker if the deduction is made in accordance with the relevant determination of that authority.

(4) Section 13 does not apply to a deduction from a worker’s wages made by his employer in pursuance of any arrangements which have been established— (a)

in accordance with a relevant provision of his contract to the inclusion of which in the contract the worker has signified his agreement or consent in writing, or

 

(b)

otherwise with the prior agreement or consent of the worker signified in writing,

 

 

and under which the employer is to deduct and pay over to a third person amounts notified to the employer by that person as being due to him from the worker, if the deduction is made in accordance with the relevant notification by that person.

(5) Section 13 does not apply to a deduction from a worker’s wages made by his employer where the worker has taken part in a strike or other industrial action and the deduction is made by the employer on account of the worker’s having taken part in that strike or other action.

(6) Section 13 does not apply to a deduction from a worker’s wages made by his employer with his prior agreement or consent signified in writing where the purpose of the deduction is the satisfaction (whether wholly or in part) of an order of a court or tribunal requiring the payment of an amount by the worker to the employer.

[callumsgran]

PT do you happen to know if benefit claimants have the same rights?

 

Sorry to hijack

[gressfjell]

I personally think that overpaying an employee and then expecting repayments from them over a long period of time even into their future jobs is nothing short of modern day tyranny, something which should have gone out with the Sheriff of Nottingham...

Should they even be in business at all if they are so bad at looking after their bottom line? At what point do employers take responsibility for being so incompetent with their finances? Or is keeping employees in debt to them against their will over a long period of time (years in many cases...) a way of maintaining a regular income for themselves?! Think about it - the big companies must have a fair number of employees in debt to them through overpayment in any one year, they do it to at least one person per year and very few people can afford to pay it back in one go. So there are thousands of workers across this country, indeed this world, walking round for months and years with a debt round their necks, often complete with CCJ, that somebody else's incompetence gave them! That's a lovely long term income for a badly run business isn't it! Forgive me for being cynical but the hardship of the average blue chip company through overpayment is relatively shortlived compared to that of the average employee.

I feel that the law ought to be changed so that employers can only reclaim a certain percentage back (say 50%) and carry some of the legal and financial burden that they expect employees to carry.

I bet we'll soon see a sharp drop in the number of employers making 'accidental' overpayments.....

[gressfjell]

Unfortunately pt2537 I think Aaron M is right:

Read Sections 13 and 14 of your Law entry again. I just copied and pasted it here:

 

"(Section)13. Right not to suffer unauthorised deductions.....

........

(Section)14. Excepted deductions.

(1) Section 13 does not apply to a deduction from a worker’s wages made by his employer where the purpose of the deduction is the reimbursement of the employer in respect of— (a)

an overpayment of wages, or

(b)

an overpayment in respect of expenses incurred by the worker in carrying out his employment,"

 

As you may guess I too am going through an overpayment issue from a couple of years ago when I was paid long term sick pay for a month or two longer than I should have been. Months prior to that they did the same thing and are now expecting me to repay the whole £2000! Look, I was ill at the time, I was far more concerned with keeping a roof over my head and recovering than being my company's payroll department's mother making sure they were doing the job they get paid to do.

I just think they have a cheek and need to take responsibility for their own mistakes. They have put someone into debt against their will, someone who assumed they knew what they were doing.

Like I said, change the law to limit the amount of overpayments they can reclaim and they'll soon stop messing up!

[fromelad]

Can anyone comment on my situation which is slightly different.

 

I have been long term sick for a little over a year. I receive no payment from my company as they only give 5 days sick pay per annum or illness.

 

This month out of the blue I was paid about £800, a call to payroll told me it was because my latest sick note had not been passed to them so they assumed I was at work, hence the payment.

 

Now as they are not paying me there is no wage to deduct from and my only income is ESA 64 pounds a week.

 

Payroll promised to "get back to me" but so far I have heard nothing.

 

In the background the company are going through the process of dismissing me on grounds of capability which I do not dispute.

 

My question is, how do I stand legally regarding the over payment ?