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Q: Legal Rights on wages paid which company later requests back ( Answered,   2 Comments )
Subject: Legal Rights on wages paid which company later requests back
Category: Relationships and Society > Law
Asked by: jasonscott1-ga
List Price: $20.00
Posted: 20 Mar 2006 19:34 PST
Expires: 19 Apr 2006 20:34 PDT
Question ID: 709876
Multi-part question...

What are my legal rights when a large corporation (corporated in
Minnesota) is claiming they overpaid a former employee and is asking
for the money back?

More precisely...(we reside in Texas)...My wife left her former job on
3/01/06. She was paid her salary on 3/01/06 (they paid her twice a
month on the 1st and 15th). On 3/15/06 they deposited another payment
which we figured was for arrears.  On 3/20/06 they emailed us and said
they made a clerical error and they want the money back.
Are we legally required to give the money back?
Subject: Re: Legal Rights on wages paid which company later requests back
Answered By: cynthia-ga on 21 Mar 2006 08:49 PST
Hi jasonscott1,

Texas law applies to this situation because the work was performed in
Texas, not Minnesotta.

This is actually fairly common in large corporations. It happens
because no one notifies the Payroll Department before the next checks
are cut. Then, the notice comes from a department that someone has
separated from employment, and the checks were mailed out a few days
prior, so they check the records and mail notices.

Part 1) of your question is fairly simple. You have the right to
inspect the payroll records so you can confirm that this is indeed an

Part 2) The corporation made a mistake that they are seeking to
rectify, your wife was paid more than she was due and hence the
employer has an absolute right to recapture the funds paid in error.
Under Texas Law, the employer has at least three years to discover an
overpayment and then sue. Once a judgment has been entered by the
court for the amount of the overpayment the employer can execute it.

If your wife left the job on March 1st and received a check that day,
it's possible she was actually DUE one more check because it's very
standard to have a lag time between the end of a pay period and the
issuing of wages for that period.

According to Texas Payday Law, if your wife was fired, or left
involuntarily, any pay due her was required to be given to her by the
6th day following the last day worked, and if this was a voluntary
separation, she would receive any final pay on the next regularly
scheduled payday:

Final Pay
..."the TPL regulates the timing of the final paycheck in section
61.014. If an employee is laid off, discharged, fired, or otherwise
involuntarily separated from employment, the final pay is due within
six (6) calendar days of discharge. If the employee quits, retires,
resigns, or otherwise leave employment voluntarily, the final pay is
due on the next regularly-scheduled payday following the effective
date of resignation..."

Just the same, if this is in fact an overpayment, it must be returned. 

Wage Overpayments
It's not clear here, so open this Power Point Presentation. It states
that overpayments must be repaid. (page 7)

There's a bunch of paycheck overpayment threads here:

Here's a forum discussion that states it very clearly:

Company mistake = extra paychecks for me
I tried to find a more similar situation, the state really doesn't
matter. I was unable to find even ONE state that allows an ex-employee
(or current employee) to keep an overpayment that was the result of a
clerical or computer error.

Your best course of action would be to work out a repayment schedule
with the employer without forcing them to resort to judicial action,
which would most certainly end in a judgment against you, and the
resulting collection fees.

I am not an attorney, so I need to urge you to seek legal advice. If
you open your local yellow pages and call ANY employment attorney and
explain the situation as you did here, I'm confident you will get a
confirmation of my research.


Search strategy used at Google:
Texas overpayment wages OR salary "final pay OR check" error OR mistake
Subject: Re: Legal Rights on wages paid which company later requests back
From: daemon_byte-ga on 21 Mar 2006 03:39 PST
In the UK you would be forced to return the money however I do not
know american law. I would first check the contract because most large
companies put clauses in their contracts to allow them to demand back
over payments. If there is no clause then I would consider seeking
advice from a professional. Either a lawyer who has a free 30min
session or a citizens advice centre. Again these are common in the UK
but not sure if you have them in America. If its only 2 weeks wages
depending on its value they might just sound up a lot and give up
since it might cost more to get it back then write it off. that said
its best to get sound advice.
Subject: Re: Legal Rights on wages paid which company later requests back
From: joe916-ga on 21 Mar 2006 05:44 PST
Your wife worked in Minnesota or in Texas? It migh help the researcher. 
In Minnesota

What if my employer overpays my wages?
The Department of Labor and Industry policy regarding overpayment of
wages is that the employer has the right to recover any overpayment
caused by a bookkeeping error; therefore, an employer must be
reimbursed for overpayment of wages.

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