We overpaid employees: Can we ask for it back? — Business Management Daily: Free Reports on Human Resources, Employment Law, Office Management, Office Communication, Office Technology and Small Business Tax Business Management Daily
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We overpaid employees: Can we ask for it back?

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in Employee Benefits Program,Human Resources

Q. We recently switched to a new payroll company. They made a mistake when they set up our overtime calculations. Our employees who work the swing shift are given an extra 25 cents for regular hours and 37 cents for overtime hours. But we accidentally paid them 57 cents extra per hour instead. Can we require the employees to repay the extra amount? — T.N., South Carolina

A. Depending on your state’s law, you may be able to ask the employees to sign an authorization form allowing the specific amount of overpayment to be deducted from their paychecks. Though it is difficult to tell from your question how much you overpaid these employees, it’s probably a small sum. If the overpayment has been going on for a long time and the amount is significant, you may want to consider collecting it over a number of weeks rather than one pay period.

However, if you are in a nonunion environment and it’s a very small sum, consider sending a notification to those employees letting them know they were overpaid, that the error has been corrected, and the company has allowed them to keep the extra amount. Even though it’s a small gesture, it could go a long way in helping employee relations.

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