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Wage Overpayment

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  • Dec 6th, 2017 8:39 pm
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[OP]
Newbie
Dec 3, 2017
22 posts

Wage Overpayment

Hi Everyone,

I tried searching for the answer from multiple sources, and am having a hard time finding a clear answer to a seemingly simple questions.

I left my previous employer about a month ago (I resigned, it ended amicably...I even gave an additional week's notice (3 weeks), to help adequately transition my projects before my departure).

I didn't get paid on my last paycheck, for which the pay date was about a week after my last day there. When I inquired with HR, they initially had no idea why I didn't get paid, and said they would look into it.

About a week later, after their "investigation", they got back to me, claiming:

- Due to a clerical error (on their end, they admitted to this), I have been overpaid on each paycheck since January 2017.
-They calculated the amount they overpaid me, and this is why my last paycheck was $0.00 (it was deducted from my last pay).
-There is still a balance owing, and they are requesting I send them a cheque for the difference remaining


I am trying to figure out whether I am legally obligated to pay them back. Everything I've read so far points to no, but can't find anything definitive. I don't want to pay them anything, mostly out of principle, and especially considering it was their mistake (for almost a year!)


I just want to make sure it won't affect my credit score or something. I will get legal advice if I need to, but rather not go through the trouble.


Thanks in advance for your help.
62 replies
Deal Addict
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Mar 23, 2008
4896 posts
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Edmonton
Talk to the Employment Standards office in your jurisdiction. Since you don't give a location, it will be hard for anyone to give you advice.

C
[OP]
Newbie
Dec 3, 2017
22 posts
I'm in Ontario.


I'm going to give them a call - but just shocked there isn't more definitive information out there on this topic.
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Mar 23, 2008
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nileskramer wrote:
Dec 4th, 2017 12:03 pm
I'm in Ontario.


I'm going to give them a call - but just shocked there isn't more definitive information out there on this topic.
From what I read, they can't just deduct it from your last paycheck (and they need to make sure they pay out holiday/vacation pay), but they CAN still sue you for the overpayment amount. And take you to collections, if they get a judgment against you.

Do you disagree with the fact that you were overpaid? That's kind of the key to this whole thing, and you don't address it at all.

C
https://www.justanswer.com/canada-law/1 ... oyees.html
http://www.ontarioemployerlaw.com/2013/ ... rom-wages/
Deal Addict
Nov 22, 2009
2068 posts
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Toronto
nileskramer wrote:
Dec 4th, 2017 12:03 pm
I'm in Ontario.


I'm going to give them a call - but just shocked there isn't more definitive information out there on this topic.
Based on here:https://employment-law.freeadvice.com/e ... ayment.htm

"the employer-employee relationship is essentially a contractual one, even when there is no written contract. In exchange for doing X work for Y hours, the employee is paid Z dollars. In a contractual relationship, each party is entitled to what it gets under the contract, no more, no less. For example if the employee did work that would earn Z dollars, but is instead accidentally paid 1.3Z dollars, or 30% more, the employee has no entitlement or right to that extra money and must return it."

"If this seems unfair consider: if your employer accidentally underpaid you, you would want them to make up the difference, wouldn’t you? And you’d have a right to make them do so. It’s the same concept: each party, the employer and the employee, is entitled to only that which it agreed to in offering or accepting the job."

"If the employee refuses to allow his or her employer to simply take the money out of the employee’s paycheck and doesn’t otherwise repay the money, the employer may be forced to sue him or her for its return. This is not the most cost-effective route, except in cases of the most egregious overpayments."

"This means an employer could fire an employee who refuses to return an overpayment. Such termination would likely even be considered for cause, which could affect the employee’s right to unemployment insurance. Therefore, employers do have leverage to get an employee to repay an overpayment of wages. The best option is to simply return the money if you find yourself in this situation." (You've already left the company, so I'm not sure if they still have leverage).
[OP]
Newbie
Dec 3, 2017
22 posts
CNeufeld wrote:
Dec 4th, 2017 12:19 pm
From what I read, they can't just deduct it from your last paycheck (and they need to make sure they pay out holiday/vacation pay), but they CAN still sue you for the overpayment amount. And take you to collections, if they get a judgment against you.

Do you disagree with the fact that you were overpaid? That's kind of the key to this whole thing, and you don't address it at all.

C
https://www.justanswer.com/canada-law/1 ... oyees.html
http://www.ontarioemployerlaw.com/2013/ ... rom-wages/
Good question. Their reason was due to a clerical error on their end, I received extra vacation pay on each paycheck since January of last year.

My reasoning is this:

-Due to an error on their end, which was undetected by both them and myself (paystub doesn't break down the pay specifically enough that would have led me to realizing this while I was employed there), I received extra pay for 10 months.
-They only caught the error 10 months later, AFTER I left. I have already spent the money considering I didn't know any better or anything was amiss.
-Considering its their error that they only caught 10 months after the fact, is it reasonable for me to have to pay them back?

I was trying to find/establish previous cases, like what is a reasonable timeline to request money back, if its their own error?
Deal Addict
Nov 22, 2009
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Toronto
nileskramer wrote:
Dec 4th, 2017 12:26 pm
Good question. Their reason was due to a clerical error on their end, I received extra vacation pay on each paycheck since January of last year.

My reasoning is this:

-Due to an error on their end, which was undetected by both them and myself (paystub doesn't break down the pay specifically enough that would have led me to realizing this while I was employed there), I received extra pay for 10 months.
-They only caught the error 10 months later, AFTER I left. I have already spent the money considering I didn't know any better or anything was amiss.
-Considering its their error that they only caught 10 months after the fact, is it reasonable for me to have to pay them back?

I was trying to find/establish previous cases, like what is a reasonable timeline to request money back, if its their own error?
Please note that if a bank makes an error and deposited someone else's money into your account, you are still legally required to pay it back regardless of if you've used it or not because it's not your money.

"https://www.nbcnews.com/business/person ... sh-n735316"
[OP]
Newbie
Dec 3, 2017
22 posts
I wonder though, if the bank deposited the money in your account, 5$ at a time, without you noticing. Then a year later, request all that money back from the individual.

Is this the same as asking for the money back within a a day or even a week?

The person did not make the mistake, nor was informed of it. I get the money is technically "not theirs", but the entity making the mistake should have some culpability as well in terms of rectifying it in a timely and reasonable manner.
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Dec 27, 2009
3550 posts
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Ottawa, ON
nileskramer wrote:
Dec 4th, 2017 12:33 pm
I wonder though, if the bank deposited the money in your account, 5$ at a time, without you noticing. Then a year later, request all that money back from the individual.

Is this the same as asking for the money back within a a day or even a week?

The person did not make the mistake, nor was informed of it. I get the money is technically "not theirs", but the entity making the mistake should have some culpability as well in terms of rectifying it in a timely and reasonable manner.
Yes, the bank would still just yank it back. I know my husband was in the military for 28 years and he said he knew of people that suddenly/unexpectedly just wouldn't receive a paycheque due to being overpaid some small amount over a period of time. When the employer noticed it they just pull it all back with no warning. If they owe you money they take their time (in the military), but if you owe them it is done just like that with no warning. It is considered your responsibility to make sure your pay is correct I guess.
[OP]
Newbie
Dec 3, 2017
22 posts
I'm willing to call it "even" - meaning I'll take the fact that my last paycheck was $0.00, but I sure as hell ain't giving them any money back.

The funny thing is, they wouldn't have even noticed the error unless I inquired about not receiving my last pay.
Deal Addict
User avatar
Mar 23, 2008
4896 posts
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Edmonton
nileskramer wrote:
Dec 4th, 2017 12:26 pm
Good question. Their reason was due to a clerical error on their end, I received extra vacation pay on each paycheck since January of last year.

My reasoning is this:

-Due to an error on their end, which was undetected by both them and myself (paystub doesn't break down the pay specifically enough that would have led me to realizing this while I was employed there), I received extra pay for 10 months.
-They only caught the error 10 months later, AFTER I left. I have already spent the money considering I didn't know any better or anything was amiss.
-Considering its their error that they only caught 10 months after the fact, is it reasonable for me to have to pay them back?

I was trying to find/establish previous cases, like what is a reasonable timeline to request money back, if its their own error?
Companies are allowed to make errors, just like people. And the fact that you've already spent the money is not their problem either.

As far as reasonable timeline... The fact that they're addressing it as soon as they're aware of the problem will likely play in their favor. If they sued you for the money 18 months from not, long after you've left the company and things were settled, then you would have more of a case.

But I'm not a lawyer, and I don't play one on TV. You can start by talking to your local Employment Standards office (as you've said you plan on doing), and go from there, I guess... But in the end, I suspect you'll end up paying it back or facing some consequences as a result of your decision.

C
[OP]
Newbie
Dec 3, 2017
22 posts
I've found this - which seems reasonable to me - and very similar to what logic I'm claiming. Just because an employer tried to remedy their mistake as soon as they knew about it, what is their responsibility from preventing such mistakes, to the determent of the employee on the other side?

The principle is referred to "estoppel"

Estoppel
[OP]
Newbie
Dec 3, 2017
22 posts
nileskramer wrote:
Dec 4th, 2017 12:54 pm
I've found this - which seems reasonable to me - and very similar to what logic I'm claiming. Just because an employer tried to remedy their mistake as soon as they knew about it, what is their responsibility from preventing such mistakes, to the determent of the employee on the other side?

The principle is referred to "estoppel"

Estoppel
In Lapointe v. Treasury Board (Department of Human Resources and Skills Development), a member was paid according to an incorrect pay scale for four years because of an administrative error. He was unaware of the overpayment until he learned from his supervisor that the employer intended to recover the money.

The PSLRB found that the four-year span misled the member about his compensation and had the effect of a promise to him. The member had entered into a financial commitment based on the incorrect salary that he was receiving, which he would not have otherwise done. Furthermore, the employer had discretion over whether to exercise its power of recovery in the member's specific situation. Given the scope of the employer's discretionary power and how long it waited to exercise its claim, the Board decided that the employer had unreasonably exercised its discretion. The overpayment amount recovered was orderd to be repaid to the member
[OP]
Newbie
Dec 3, 2017
22 posts
blitzforce wrote:
Dec 4th, 2017 1:03 pm
How much were you overpaid OP?
An amount that is very insignificant to them, and relatively more significant to me, although either way not something that would necessarily break the bank. Three figures. Keep in mind the total amount is a lot more since they deducted from my final pay as well.

To be honest, this is more for the principle of the matter. I also gave three weeks notice instead of 2, to be nice and help them, even though my new employer wanted me to start ASAP.

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