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  1. #1

    Default Can an Employer Deduct an Overpayment From Your Wages

    My question involves employment and labor law for the state of: California


    My friend's employer offers 10 days of paid vacation time up to year four, and 15 days of paid vacation time after five years of employment. She has been working at the company for a little over five years, last year she was told by her supervisor that she was entitled to 15 days of vacation time for 2014. Eight/seven months later, her supervisor retracted and said that b/c my friend started as a part-time employee, that she was not entitled to 15 days vacation yet, rather 10 days. Because she already had planned vacation time, they agreed that she could take time as unpaid. As planned she took 22 hours off in Oct 2014. However, because there was an oversight on either the supervisors part or on payrolls part (not sure which one), now three pay periods later, she was told that they are going to deduct 22 hours of pay on her next paycheck.

    Isn't this unlawful? Does the employer’s action go against California labor law section 221?

  2. #2
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    Default Re: Time-Keeping Error by Employer: Deducting Hours Already Paid

    I believe she has to authorize a deduction but there is nothing preventing them for dunning her for the money. On top of everything else, I suspect she would end up losing her job if she makes an issue about this. Granted it is probably illegal to fire her in retaliation for she reporting them to the labor people but there are many ways to terminate an employer where the retaliation could easily be hidden.




    what I don't understand is; she knows she was overpaid so why does she have a problem with the employer deducting the entire amount at once. If paid correctly she simply would not have that money so what difference does it make that they want it back right now?

  3. #3

    Default Re: Time-Keeping Error by Employer: Deducting Hours Already Paid

    It isn't her intention to file a claim or report them to the labor department, at all.

    At the time when she was paid, it was by direct deposit, she wasn't aware that she was paid for the 22 hours she took off, due to the fact that she had a lot of overtime during that pay period. She didn't notice that she was overpaid, rather that they had paid her the overtime hours (which is time and a half) and they had not paid the 22 hours.

    She is willing and asking her HR generalist if she can pay the company back in the course of a few pay periods b/c taking 22 hours out of her two week pay period (pay day is Friday and she was informed this morning) would impact her financially.

    But when she told me, I felt it was unlawful and I wanted to confirm if section 221 applied to her case.

    BTW - Thank you for your quick response!

  4. #4
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    Default Re: Time-Keeping Error by Employer: Deducting Hours Already Paid

    It is her responsibility to pay attention to her paychecks and determine if she was paid correctly.

    While the CA law does not allow for "self-help" methods it does not require the employer to eat the overage either. Which would she prefer - a potentially illegal deduction or a legal lawsuit against her by her employer (which they would have every likelihood of winning)?

  5. #5
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    Default Re: Time-Keeping Error by Employer: Deducting Hours Already Paid

    I may be confusing State laws, but I thought they were the same for all States in this regard. An employer cannot automatically deduct an amount from an employee's paycheck without specific written consent. Although the employer changed their mind (which they are absolutely able to do absent a contract or some other enforceable agreement), they are not able to just deduct what they are owed. The employee must agree to that deduction. No if the employee doesn't agree they can be fired and then sued in small claims court, but I don't think an employer can just deduct something from your paycheck without our approval.

  6. #6
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    Default Re: Time-Keeping Error by Employer: Deducting Hours Already Paid

    That is the situation in most states but that is irrelevant in a way. The employer has the position to where they could deduct it. The employee can file a complaint if they do without permission from the employee

    the the employer is probably restrained from terminating the employee for filing the complaint bit as we all know, there is always a way to fire an employee and hide the real reason.

    Employee owes the money so they simply need to return it. It is their failure for not realizing there was a mistake on the check and they spent the money.

  7. #7
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    Default Re: Time-Keeping Error by Employer: Deducting Hours Already Paid

    Quote Quoting PADriver13
    View Post
    I may be confusing State laws, but I thought they were the same for all States in this regard. An employer cannot automatically deduct an amount from an employee's paycheck without specific written consent. Although the employer changed their mind (which they are absolutely able to do absent a contract or some other enforceable agreement), they are not able to just deduct what they are owed. The employee must agree to that deduction. No if the employee doesn't agree they can be fired and then sued in small claims court, but I don't think an employer can just deduct something from your paycheck without our approval.
    No, that is not correct. It is the case in many states but it is not universal. There are states where no employee authorization is required.

  8. #8

    Default Re: Time-Keeping Error by Employer: Deducting Hours Already Paid

    I agree. It is her responsibility to make sure that she is paid correctly, just like it is the responsibility of her supervisor to make sure her time was submitted correctly. But my friend didn't make sure she was paid correctly (her bad), and payroll didn't process her paycheck correctly b/c her supervisor submitted her time incorrectly (their bad). Time reporting in this company is submitted and approved by a supervisor or department manager before it ever goes to payroll. Its human error b/c we trust a) that employees will review if they were paid properly and notify an employer of any discrepancies, b) that our supervisors and/or department managers have done their job correctly and so “sometimes” we don’t bother to do our part in reviewing our direct deposit paychecks (bad choice).

    Her supervisor only notified her yesterday, after 2.5 months b/c departments were asked to submit their vacation audits for each of the employees that report to them before the end of the year. My friend isn't making a complaint to the Labor Department about this matter. My friend also isn't disputing that she owes the company 22 hours. It was her supervisor who informed her about removing 22 hours in her next paycheck, and I felt this was unlawful of her supervisor to decide/say to an employee, so I urged my friend to contact her HR Generalist about setting up a payment plan to repay the company.

    I just wanted to know if California Labor Code Section 221 applied to her matter, where it states that it is unlawful for an employer to deduct overpayment already paid-out to an employee or if her matter was slightly different and code-section 221 didn’t apply here. Not b/c I think she should complain to the Labor Department (NO WAY JOSE’), but b/c I think her supervisor isn’t speaking from a place of knowledge (as someone who submits and approves time for 30+ employees) I would never handle it this way or tell an employee that the company is going to remove any amount of hours from their next paycheck. I would inform HR about the error and let HR decide how to proceed and handle it. It just seemed to me that this was something her supervisor decided to do/say adhoc to cover her butt w/o reporting it to HR for proper handling.

    Again, she isn't arguing that she owes her employer 22 hours, she’s kicking herself for not reviewing her direct deposit paycheck back in October, and she is more than willing to pay her employer in return. I just wanted to know if California Labor Code Section 221 applied to this matter. BTW – her HR Generalist contacted her this morning saying she nor other HR personnel were aware of the matter and that she will be in contact with her later this afternoon about setting up a payment plan after speaking to her supervisor.

    I still would like to know if California Labor Code Section 221 applied to this particular matter? :-) Yes or no? :-)

  9. #9
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    Default Re: Time-Keeping Error by Employer: Deducting Hours Already Paid

    And I want to know why your friend's paycheck and her employer's pay practices are any of your business.

  10. #10

    Default Re: Time-Keeping Error by Employer: Deducting Hours Already Paid

    For crying out loud.

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