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Wage Overpayment

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  • Dec 6th, 2017 8:39 pm
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Deal Addict
Nov 22, 2009
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nileskramer wrote: Sorry if Im beating a dead horse, just trying to clarify the distinction in my head between legality and ethics. I won't accept the ethical argument of "you got overpaid, so pay them back". Its not that black and white to me and many other factors involved. I'm shocked to think some people on here would just blindly accept that is always the case.
Are we talking about this legally or ethically?

Legally, you need to pay back money that isn't yours.

Ethically, well its up to however YOU feel. You created this thread to ask for confirmation that you've done the right thing, but no one is agreeing with you, yet you still try to rationalize your decision.

If "three figures" means that much to you that you'd rather fight this out, then just wait for them to send you a collection letter.
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Nov 22, 2009
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nileskramer wrote: I couldn't find anything (legally) in terms of statute of limitations or restrictions on the parameters. IMO, it seems logical to me that this should exist. Not saying it applies to me per se, but I still think there should be some
Well, you are overpaid by accident. I don't think it's rocket science to require a specific rule of law to state that because you were overpaid, you need to give them their money back.

I also don't think a few hundred dollars is going to cause you "undue hardship". I assume your "three figures" is close to a thousand dollars, or else you'd just say "it's only a $100 bucks".
Newbie
Dec 3, 2017
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blitzforce wrote: Well, you are overpaid by accident. I don't think it's rocket science to require a specific rule of law to state that because you were overpaid, you need to give them their money back.

I also don't think a few hundred dollars is going to cause you "undue hardship". I assume your "three figures" is close to a thousand dollars, or else you'd just say "it's only a $100 bucks".
It's not causing me undue hardship. But, in theory it could, if they were asking for a lot more.

I think you're not understanding the fact that I'm not trying to rationalize the legal argument, I already have that answer, more or less.

I just find it interesting that your own personal ethics on this are so black and white. Maybe I don't see it the way everyone else does, but I still don't think it would be "right" from a moral standpoint, given everything known about this specific situation, for them to request it back.

The company I work for now has under-billed clients in the past. Instead of asking for the money back (which they are legally entitled to), they didn't, as it was their own mistake.

Anyways, I'm going to call this one. Thanks to everyone for providing the legal answer I was looking for.
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Mar 23, 2008
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So just to pick some nits here...

It seems that you're acknowledging that LEGALLY, you're obligated to pay them back. Ethically, you feel there's a grey area? Because you've mentioned a few times that if you were legally required to pay them back, you would.

Second, as mentioned before, there is limited support for your "grey area" arguments in the cases you cited, mainly due to the significance of them. 4 years of overpayments vs. 10 months in your case is the closest match. But even with that, if you read the actual case decision (http://pslreb-crtefp.gc.ca/decisions/fu ... 1-57_e.asp), you'll see that the amount and impact of the error were also significant. The guy was basically screwed out of his retirement after working a low paying job for 35 years, and as a result of having to pay back $300/month (for the overpayment), he had to take out a line of credit to pay for the foster home he and his wife ran. And in fact, there was another employee who was caught in the same overpayment issue as the cited case who DID have to pay the money back, because the impact to him were not as significant.

If you go to the CanLII website and search for "employer overpayment estoppel", you'll find numerous links to review. In particular, the Indian and Northern Affairs department got caught numerous times with their pants down. And in the cases that I read, the application of "estoppel" was shot down more often than not.

Here's some notes of what needs to be proven from one case (https://www.canlii.org/en/ca/pssrb/doc/ ... ltIndex=10):
i. There must be an overpayment of salary or other compensation. This overpayment must have the effect of misleading the employee into a bona fide belief in entitlement to a mistaken salary level.

ii. The employee must rely on the salary to his detriment, such that he experiences what can be characterized as a material change in circumstances.

iii. Mere spending of the money is not sufficient to show a detriment. There must be a commitment made or a project undertaken in reliance on the mistaken salary, which is not reversible due to the contractual nature of the commitment or the passage of time.

iv. Two further considerations arise from obiter dicta in several of the cases. There appears to be some duty on the employee to attempt to mitigate the consequences of the employer’s error, but this does not appear to extend so far as to require the employee to accept a reduced standard of living (see Molbak). Similarly, there appears to be a duty on the employer to discover and correct the error as soon as possible.
You would need to prove that you made a material change in your circumstances due to the error. The dude with the foster home and at the end of his career after 35 years of a low paying job? He could prove his case, and got his 10k back. Can you prove the same level of material change?

So basically, to answer your question of how far back can the company go in trying to recoup their money? As far back as they need to. The case you cited wasn't necessarily impacted by the 4 years of overpayments, but by the significance of repaying the money to the employee affected. Another employee who was overpaid just as long still had to repay the money, because it didn't cause them the same degree of hardship to repay.

C
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Nov 22, 2009
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nileskramer wrote: The company I work for now has under-billed clients in the past. Instead of asking for the money back (which they are legally entitled to), they didn't, as it was their own mistake.
I assume they intentionally under bill in order to make sure they can keep doing business with them. I'm not sure how you can use this to rationalize that instead of going for the top-dog, they want to collect from you instead.

"Why is CRA auditing me and asking me to pay back their overpayment mistake? They've already issued the NOA, and I've budgeted my vacation based on my tax refund. Why are they going after spare-change when there are millionaires/billionaires evading taxes?", same logic.
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Mar 23, 2008
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BTW...

Realistically, I was in your situation, I'd probably:
1) Phone up HR and bitch up a storm about their screw-ups, and that they've gotten everything they're going to get from me.
2) Wait for a demand letter from them
3) Get them to document how they calculated the overpayment (basically drag it out as long as possible)
4) Wait for the "Pay or we'll sue" letter (maybe, or maybe I'd just got to step 5. Depends how p1ssed off I was still)
5) Pay the buggers and get them out of my life

But if you're operating under the premise that you'd win if you went to court, I'm thinking you'll be out of luck. That's all I'm saying.

C

ETA: I'd also rip them a new one about the deductions that they weren't allowed to take off my last paycheck (when I talked to HR in step 1), and tell them that in exchange for not taking them to the Employment Standards people, they can just get out of my life.
Deal Addict
Nov 22, 2009
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CNeufeld wrote: ETA: I'd also rip them a new one about the deductions that they weren't allowed to take off my last paycheck (when I talked to HR in step 1), and tell them that in exchange for not taking them to the Employment Standards people, they can just get out of my life.
Damn, instead of burning bridges, that's like blowing it up.
Newbie
Dec 3, 2017
22 posts
CNeufeld wrote: BTW...

Realistically, I was in your situation, I'd probably:
1) Phone up HR and bitch up a storm about their screw-ups, and that they've gotten everything they're going to get from me.
2) Wait for a demand letter from them
3) Get them to document how they calculated the overpayment (basically drag it out as long as possible)
4) Wait for the "Pay or we'll sue" letter (maybe, or maybe I'd just got to step 5. Depends how p1ssed off I was still)
5) Pay the buggers and get them out of my life

But if you're operating under the premise that you'd win if you went to court, I'm thinking you'll be out of luck. That's all I'm saying.

C

ETA: I'd also rip them a new one about the deductions that they weren't allowed to take off my last paycheck (when I talked to HR in step 1), and tell them that in exchange for not taking them to the Employment Standards people, they can just get out of my life.
CNeufeld - The steps you listed is exactly what I'm going to do.

My suspicion, given how large the company is (and my intimate knowledge of how disorganized they are internally), is that the HR/Payroll person is just "following procedure" by notifying my and requesting repayment.

I'm guessing a portion of these case just get paid out by individuals, and another portion is contested, at which point they usually back down (depending on the situation and how much is owed).


I guess the bottom line would be that I just didn't want to concede without a fight. If some people find those ethics questionable, that's cool - I gotta do what I think is right ultimately.
Newbie
Dec 3, 2017
22 posts
blitzforce wrote: Damn, instead of burning bridges, that's like blowing it up.
You really like authority, don't you? I suppose you probably get immense pleasure everytime you have to pay taxes, and maybe even served in the military at some point?

I'm all for following the rules - just not blindly.
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Nov 22, 2009
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nileskramer wrote: You really like authority, don't you? I suppose you probably get immense pleasure everytime you have to pay taxes, and maybe even served in the military at some point?

I'm all for following the rules - just not blindly.
I don't get "immense pleasure" from paying taxes. I do what I need to do because that's the law. You don't have to follow the rules "blindly", but it doesn't mean you are right legally. As I've said before, is this a question of whether you need to pay it back ,or whether you should pay it back?

Legally need to pay it back? Yes

Should you pay it back? Depends on how you want to rationalize
Deal Guru
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Mar 23, 2008
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blitzforce wrote: Damn, instead of burning bridges, that's like blowing it up.
Giving them the gears because they did something that any junior HR/payroll person should have know they weren't (not just ethically, but also legally) allowed to do? Yeah, that's blowing up a bridge...

C
Last edited by CNeufeld on Dec 6th, 2017 4:16 pm, edited 1 time in total.
Newbie
Dec 3, 2017
22 posts
blitzforce wrote: I don't get "immense pleasure" from paying taxes. I do what I need to do because that's the law. You don't have to follow the rules "blindly", but it doesn't mean you are right legally. As I've said before, is this a question of whether you need to pay it back ,or whether you should pay it back?

Legally need to pay it back? Yes

Should you pay it back? Depends on how you want to rationalize
Right. All I was doing is trying to see if there was congruence between my subjective rationalization, and the law (which often times there is).

When a cop pulls you over, legally you might be required to receive a ticket, but often times they apply rationalization specific to the situation. That's all I'm saying

As CNeufeld mentioned, I do have a couple of things I can fire back with, as they made a few errors on their end. I will. Pretty cut and dry.
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Nov 22, 2009
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CNeufeld wrote: Giving them the gears because they did something that any junior HR/payroll person should have know they weren't allowed to do? Yeah, that's blowing up a bridge...
C
Inexperienced junior HR person I guess. I've had experienced a similar situation in the past where I was overpaid by a week for my bi-weekly paystub, and they ended up deciding a week from my next. I guess if I know for a fact that I was overpaid I wouldn't keep arguing. However, if I know I was underpaid, I'd fight it out.
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Nov 22, 2009
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nileskramer wrote: Right. All I was doing is trying to see if there was congruence between my subjective rationalization, and the law (which often times there is).
I'm really not trying to attack you, just saying that if you need to pay it back, then yes because you were overpaid. Ethically, if you really don't want to pay them back, just wait it out and waste their time.
Deal Guru
May 29, 2006
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owing a business/employer money and owing the bank/government money are very different situations. i would do nothing in this situation. if business A is out 200$, i can guarentee that 99% of them are going to swallow that cost go thier merry way.
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Mar 23, 2008
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blitzforce wrote: Inexperienced junior HR person I guess. I've had experienced a similar situation in the past where I was overpaid by a week for my bi-weekly paystub, and they ended up deciding a week from my next. I guess if I know for a fact that I was overpaid I wouldn't keep arguing. However, if I know I was underpaid, I'd fight it out.
And if that's the case, they should be fed a healthy dose of crap, so they don't do it the next time. Apparently they need to learn some of the ESA.

C
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Nov 22, 2009
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CNeufeld wrote: And if that's the case, they should be fed a healthy dose of crap, so they don't do it the next time. Apparently they need to learn some of the ESA.
C
At the end of the day, I feel like the junior HR person will be the one that suffers the most, not the employer. OP left because of how he's being treated, and the employer will just put his/her frustration towards the HR person.
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Dec 3, 2017
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blitzforce wrote: At the end of the day, I feel like the junior HR person will be the one that suffers the most, not the employer. OP left because of how he's being treated, and the employer will just put his/her frustration towards the HR person.
With all due respect - "junior HR" person made a mistake that could have potentially had a huge impact on someones situation. What I was on the hook for paying back $10,000? Their mistake resulted in this. This brings me back to my original point that they have culpability. If they're a shitty company that will take out their frustrations on the junior HR person, then they should leave and find another job (and learn from their mistake). In fact, this company has an abysmal employee retention rate, due to a multitude of factors.
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Nov 22, 2009
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nileskramer wrote: With all due respect - "junior HR" person made a mistake that could have potentially had a huge impact on someones situation. What I was on the hook for paying back $10,000? Their mistake resulted in this. This brings me back to my original point that they have culpability. If they're a shitty company that will take out their frustrations on the junior HR person, then they should leave and find another job (and learn from their mistake). In fact, this company has an abysmal employee retention rate, due to a multitude of factors.
How are you going to justify to the court you didn't know you were overpaid by $10k??? If you were really overpaid by that much, you will not win this case in court.
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Mar 23, 2008
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blitzforce wrote: At the end of the day, I feel like the junior HR person will be the one that suffers the most, not the employer. OP left because of how he's being treated, and the employer will just put his/her frustration towards the HR person.
Your assumptions are often head-scratchers, btw... For whatever reason, you're assuming that a "junior HR person" was responsible for trying to collect the money incorrectly, and then you go off and postulate situations using your assumption as a fact.

In counterpoint, I'd be willing to bet that any decision to make significant payroll deductions like this would have to be signed off by a manager-level employee. The OP lost their last paycheck AS WELL AS another 3 figure amount, so we're probably talking about several thousand dollars.

C

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