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How to approach payroll overpayment

August 26th, 2014

Mistakes happen, and sometimes an employer overpays employees. There are many reasons this can happen, and there are just as many reasons to fix it.
An error such as this does not mean the employee is entitled to the money, but they are instead required to pay it back.
Read more to learn about how state laws can differ and how you can approach this kind of error.

Although infrequent, there are times when an employer makes an overpayment to an employee. Reasons for an overpayment could stem from an accounting error, paying an employee at a rate that is too high or incorrect benefit deductions. Other reasons include terminated employees who receive vacation time before it was earned and sales people whose commission was too large. Regardless of how often or the reason overpaying an employee occurs, the employee is responsible for repaying the money when it is demanded. An error is not an automatic entitlement to keep unearned money.


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