Overpayment of Wages

purpleozzie1 · 10 July 2017 at 5:08PM

Hi guys,

I was overpaid considerably by my work in April. It was noticed in june and they gave me a nett figure to pay back, which I did.. The over-payment amount they gave me made sense to me so thought everything was sorted..

two months later they took out an additional £181 without telling me..

When I queried it they told me that:

Because I was overpaid massively in April I therefore paid less tax in May as tax is based on cumulative earnings.

Once this had been recalculated I had still been overpaid so they took this back and also an additional £68.12 which was paid into my pension based on the inflated pay I received..

They say they can only pay me back the pension amount once they receive it back.

Firstly are they legally allowed to take money from my salary without first informing me and secondly shouldn't they pay back the pension amount ASAP as it was their error in the first place..

I didn't notice an over payment in May as I am paid commission as well as basic so never really know from month to month how much I should receive.. Therefore In assumed May's payment to be correct.

This has left me short this month because of their error..

Any advice would be appreciated..

Cheers,

ReadingTim · 10 July 2017 at 5:28PM

Yes, they can withhold from salary in the manner they did, and yes, they're right about the pension: they've passed your money on to the pension fund, so need to get it back from them before they can give it to you.

In light of the fact that it was a series of errors on their part which might leave you out of pocket, I would ask if there's any possibility of an advance of either the pension amount, or some of next month's salary on the basis of the hardship this error has cost. However, as their actions have been entirely legal, this would have to be a gesture of goodwill on the basis of the errors made on their part.

Furthermore, as the sums involved seem to be £181 and £68; they can't be too responsible for the fact that an employee is cutting things so fine that a sum of c.£250 has push him over the edge...can you not tighten your belt a little and put some stuff on the credit card until next month when everything ought to be sorted?

purpleozzie1 · 10 July 2017 at 5:46PM

This is from an article in the Guardian:

Employees must be consulted about how and when the money is to be repaid and give their written consent. Otherwise, employers might be breaking the law, says Andrew Robinson, partner at accountants Clough & Company.

Should they not obtain this written authorisation, employers may find themselves at an employment tribunal fighting a case of unlawful deduction of earnings. This is because the Employment Rights Act 1996 states that companies cannot deduct wages from employees without first obtaining authorisation.

tbh I hate my company, they treat their employees terribly and I have another job to go to but haven't yet handed in my notice.. So I'm up for a fight...

agrinnall · 10 July 2017 at 7:32PM

I think you'd be on to a loser trying to fight this unless the sums have been calculated incorrectly. I wouldn't view this as a deduction of earnings but a recovery of overpayment, and I don't believe they would have to get your consent to do that.

jobbingmusician · 10 July 2017 at 7:37PM

What I would do in your position is explain to your employers that although you are of course willing to pay back anything to which you are not entitled, the fact that they have taken the extra £250 odd has left you seriously short of money. Point out to them if it is actually costing you money, in bank charges or extra penalties for any payments you are unable to meet, for example. Ask if they can re-credit you the money and let you pay it back over several (maybe 10?) months rather than being hit with it all at once, and of course explain to them, as you did to us, why you didn't notice the original overpayment.

sangie595 · 10 July 2017 at 8:08PM

purpleozzie1 wrote: »

This is from an article in the Guardian:

Employees must be consulted about how and when the money is to be repaid and give their written consent. Otherwise, employers might be breaking the law, says Andrew Robinson, partner at accountants Clough & Company.

Should they not obtain this written authorisation, employers may find themselves at an employment tribunal fighting a case of unlawful deduction of earnings. This is because the Employment Rights Act 1996 states that companies cannot deduct wages from employees without first obtaining authorisation.

tbh I hate my company, they treat their employees terribly and I have another job to go to but haven't yet handed in my notice.. So I'm up for a fight...

Know the definition of "might"? Section 14 of said Act explicitly permits deductions from wages which arise from overpayments. That's why newspapers don't represent people in court - not everything you read happens to be true (or what toy think it says). You might be up for a fight. It's a fight you will lose.

getmore4less · 11 July 2017 at 7:36AM

Rather than worrying about can they do it(they can) make sure they have the calculations correct.

do the cash flow and calculations to check they have done it right.

You should also be paying much more attention to your gross pay to make sure they have the variable bits right.

Trying to undo overpayment using net can get messy sometimes much easier to just treat it as advanced pay and reduce future gross pay.

Manxman_in_exile · 11 July 2017 at 2:14PM

ReadingTim wrote: »

Yes, they can withhold from salary in the manner they did, and (1)yes, they're right about the pension: they've passed your money on to the pension fund, so need to get it back from them before they can give it to you.

(2) In light of the fact that it was a series of errors on their part which might leave you out of pocket, I would ask if there's any possibility of an advance of either the pension amount, or some of next month's salary on the basis of the hardship this error has cost.

(1) Is that right? The OP seems to have agreed a nett repayment figure with the employer so I would have thought that it was up to the employer to sort this aspect out with the pension provider?

(2) I would agree with that 100%.

I also agree with getmore4less to double-check the employer's calculations - especially as they seem to have been wrong the first time they did it.

I don't see a problem in dealing with overpayments in nett terms. There were so many in the NHS that all pay clerks had expertise in dealing with them (or at least the payroll system did). I'd be concerned if my payroll couldn't cope.

Undervalued · 11 July 2017 at 2:48PM

sangie595 wrote: »

Know the definition of "might"? Section 14 of said Act explicitly permits deductions from wages which arise from overpayments. That's why newspapers don't represent people in court - not everything you read happens to be true (or what toy think it says). You might be up for a fight. It's a fight you will lose.

Exactly.

OP, it is as much your responsibility to check that you have been paid the correct amount as it is your employers. In 99.9% of circumstances any accidental overpayment is recoverable without advanced notice.

There is also the practicality. They have done it so even if they were legally in the wrong to deduct the amount without your consent then what redress do you expect to get? You don't seem to be disputing the calculations so I assume they are correct?

If you are intending to leave then I would double check any rules surrounding payment of commission. It is possible that this may be zero during your notice period so it would be good not to get any further nasty surprises.

Overpayment of Wages

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