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Paid too much?

25 June 2010

What to do if your employer claims to have overpaid you.

Is your pay right?

In the latest in our series of articles looking at key legal issues our members may face at work, we look at what you can do if your employer claims to have overpaid you

In general, an employer is not allowed to simply to take money out of your pay packet unless there is a signed agreement in place (such as for deductions of union subscriptions) or the deduction is required by law (e.g. tax and National Insurance).

Otherwise, if an employer takes money from your salary it may be an unlawful deduction and you can make a claim in the employment tribunal to get the money back.

However, there are some exceptions, including that employers can deduct money
from your pay when they are seeking to recover an overpayment of wages – even if the overpayment is due to their error. It is important that anyone who is informed that they have been overpaid salary (or expenses) contacts their union rep straight away.

Even if it isn’t possible to stop the employer taking back the money, it may be that the union can negotiate repayment terms, or even a reduction in the amount to be recovered, so as to minimise any financial difficulties.

When is an overpayment not an overpayment?

You need to check your wage slips carefully to make sure that what your employer is claiming to be an overpayment really is one.

If they have informed you, wrongly, of the amount of your salary, you may be able to claim that you are entitled to the increased amount of salary that you have been paid.

This was the situation for Mrs Keenan, a part-time worker who had been overpaid for many years, according to the claim from her employer, Barclays Bank. However, the bank had, on more than one occasion, told her that her salary was, in fact, the amount that they were paying her – including on a reference for a mortgage.

The judge in the case decided that the actions of the bank, even if unintentional, were enough to give Mrs Keenan a contractual entitlement to the higher wage. But it must be said that this is a rare case. Usually, provided what the employer intended was clear, a mistake in one document will not be enough to give you a contract entitling you to the higher salary.

  • Full story along with help and advice page 24, PCS VIEW July/August 2010