Overpaid salary

Kunama

Hi all,

I am posting on here on behalf of my partner in hope that you may be able to offer some help with a recent problem we have found ourselves faced with regarding and overpayment on his wages. I have also posted in another board as I was unsure where to post such a problem.

Many years ago, back when they first started, my partners company offered a salary sacrifice scheme in the way of Childcare vouchers to their employees which my partner and a number of other employees joined. In our case, around 2 years ago it worked out more beneficial for use to claim our childcare through tax credits so we came out of the scheme.

Out of the blue 3 months ago, my partners boss called him into a meeting to tell him that the accountants contracts to oversee the finances and payroll had made an error and that for the duration of the scheme all the people involved had been incorrect paid. All people had the sacrifice removed from there wages, then added back onto there wages. In effect paying each person an additional amount of money equivalent to the value of the sacrifice.

I think the hope was that there would be some kind of comeback on the accountants for the error, but today we received notification that he has been unsuccessful in reclaiming the money from the accountants and therefor have been instructed by his solicitor to begin reclaiming the money from the employees involved. For us this is a sum of 8500. My partners boss is aware that we are in a debt management plan already, making token payments only, and has offered to allow him to pay in installments. He has until the 21st of November to respond with an acceptable offer of payment.

So here we are. I am currently reeling from this news as the more I think about the problems the more far reaching I can see the problem being. My thoughts on this so far are:

1. Seek advise from CAB

2. Offer his employer a holding letter to stop him taking action until we can seek guidance. - My partner has no holiday left, is he entitled to take time off to seek this guidance.

3. How do I find out about the tax, this either means a rebate pertaining to the £8,500 or and underpayment depending on how it was dealt with by payroll.

4. Surly if the error was that of the accountants, they are the ones liable, is that not covered by professional indemnity insurance?

5. Can they take this money back from his wages without consent, if doing so would render us unable to meet basic living costs i.e food mortgage ect.

Anyone thoughts or information on this would be greatly appreciated

Many many thanks in advance

InsideInsurance

1) You can, never a fan of the CAB personally

2) Your not legally entitled to paid time off for seeking legal advice. The employer may either allow him to take unpaid leave or as a gesture of good will allow an hour or two of paid given its an issue of their causing

3) Repayment is normally done by salary deduction and therefore the tax resolves itself because you paid higher tax that year but will pay lower tax during the repayment. Obviously if tax rates change then it may be different

4) It doesnt matter where the error happened, your partner had something that doesnt belong to him and the rightful owner is entitled to have it back. Even if the insurer did pay out they would be the ones looking to recover it from you and they are likely to be much harder to deal with than an employer that has to consider that employees future moral/ engagement as these are a proxy for work

5) It depends on the wording of his contract and what it says they can take from the salary


You owe the money, it may be someone elses fault it was given to you but that doesnt make it yours. That said, employers tend to be lenient over repayment periods etc because of (a) engagement as above and (b) as courts tend to be.

It may be you dont want your employer knowing how bad your home finances are but it is going to be much easier to resolve if you are open about everything thats going on and prove you can only afford $1 a week repayment (or whatever it is) rather than getting a CCJ against you

pelirocco

http://www.redmans.co.uk/uncategorized/how-an-employer-can-reclaim-overpaid-wages-a-quick-guide


Where an employer has made an accidental overpayment of wages, the statutory position is that the employer can recover this by deducting the overpayment from future wages or salary. This is covered by s.14 of the Employment Rights Act 1996, which provides that protection from deductions from wages does not apply to an overpayment of wages or employment-related expenses. If an employer makes an overpayment in one pay month, it should be relatively straightforward for it to deduct this in the month following.

The position can become more complex if the employer has made overpayments over a long period of time, perhaps due to a payroll error, or where the overpayment was made some months ago and has only recently come to light. The employee may have a defence to a claim for repayment on the basis that he or she was led to believe that there was an entitlement to the money and that, in good faith, he or she has "changed [his or her] position" in reliance on the money. This usually means that the employee has spent it. Provided that the overpayment is not the fault of the employee, he or she may be able to defend a claim for repayment on these common law grounds. An employer will be in a stronger position if a prompt discovery is made and the overpayment is quickly brought to the employee's attention.

In practical terms, where an overpayment is discovered after some time, it may be advisable for the employer to discuss this with the employee and try to agree a programme of repayment over a period of time. In some cases it might be practical for the employer to consider writing off part of the overpayment rather than become involved in legal proceedings to recover the full amount. However, each case should be considered on its individual facts

Kunama

I must confess that I've not been a fan of CAB either, but is there anyone else you can suggest?
Thank you for the link it looks like there are lots of details to be found there. I will take a good look through it