Claw backs over overpaid wages

susanne · PayPerShop Newbie Joined: 20 Jun 2008 Posts: 2

hello this is my first post here and i hope this is the right place for me to ask this - and would value some guidance - thanks

My lovely mid-40-'s cousin who works part time for a local authority in the north was recently comparing pay slips with 2 colleagues, and it now transpires that the authority say that she has been over-paid for 2 years and wish to claw back the money. (�1000k). She is in serious financial dooo as it is - and has 5 jobs to keep her and her family going.

she works as a cleaner/care worker (different pay rates for both jobs) and works different hours some weeks.

Two years ago the local authority changed its payroll software and started to "average out" hours worked over a 3 year period - this means that she is not necessarily paid for the number of hours actually worked each month. No information was given to staff about the new scheme when it first started.

Managers are not sent information from payroll about how many hours their staff are paid for.

Pay slips do not show the number of hours worked, nor the pay rate of each hour. She has got all her payslips for the past 3 years - but the number of hours are not on them.

She is not in a union -as she had a run-in with the in the past and does not want to join again.

Any suggestions as to how to offer her some guidance please ?

many thanks

Ian Whyteside · Posted: Mon Jun 23, 2008 4:09 pm Post subject: Claw Back over overpaid wages

Hello Susanne,

Welcome to the forum, we all hope you find lots of interesting information from the group of practitioners who regularly post.

Your cousin is in a difficult position because technically the employer does have the right to recover pay which should not have been paid to her. I say technically because there are a few situations which make it more difficult for them than normal and given the information you have provided I think there is scope for negotiation.

Firstly I feel it is important to establish if she had any inclination that she was being overpaid. I know she has already expressed surprise upon being asked for the money back but then we all do that, don't we? If she had any idea that something was wrong there is a risk that someone in the council will be aware of it, she may have said something in passing to someone, so it is important that if she wants to challenge this it is because she really did not have a clue about it.

You mention that the process was changed two years ago and she had no information about it. Again she needs to be honest about whether or not that is the case because the council will be allowed to rely on detailed explanations if they can prove they were sent out, they do not have to prove they were received.

The fact that your cousin does not have the hours shown on the payslip does give rise to a defence that she was not aware that an overpayment was taking place so there is scope to challenge the demand and at least reduce it. This is on the basis that the absence of detailed information gives her the right to expect that the money she is receiving is her own.

I would suggest that she asks for a detailed breakdown of the total being demanded, with gross and net figures split between the various tax years. She will need that to deal with any benefit applications which may require revision and she needs to show that it is not her fault that the pay figures are being revised.

I would also suggest that she makes it very clear she does not agree with the requirement to repay, citing the lack of information provided and her financial situation as evidence of both her disagreement and inability to repay.

She needs to have the figures checked against her actual pay and the various contracts so the process by which the council turns her contractual allowance into the pay period by pay period payment made to her is important as well otherwise even us experts are going to struggle.

If she agrees to make a repayment the next thing is to settle on a final value and a repayment agreement and here she must be able to prove her financial situation does not permit speedy repayment, they may in fact waive part of the demand in return for an agreement.

Above all she must remember that the council has the right to bypass her and go to the courts to obtain a judgement. This will count against her in financial terms but on the other hand they will probably know that the chance of getting the money back quickly that way are slim as well.

I hope your cousin has access to someone who can check the figures, is that going to be you? Also someone to help construct responses to the council in a way which shows willing but makes it clear that she has a problem with the whole demand. I know she is not in the union, I have mixed feelings about that because a good representative can help enormously but bad ones will merely use her situation to score points off the employer and make trouble.

However, I presume she is not alone with this situation, can she get together with others who are similarly affected and challenge it jointly?

Let us know more when you get it and good luck.

Ian Whyteside

susanne · PayPerShop Newbie Joined: 20 Jun 2008 Posts: 2

Ian, many many thanks for such a clear and full response, i am most grateful and will forward it onto my cousin.

She discovered that she was being overpaid because over coffee about 3 weeks ago, one of her colleagues mentioned how much she was earning, and Debs said, "that cant be right - they've underpaying you cos we work the same hours and i get �x". The colleague went to the wages department who then realised that they had been overpaying Debs !!!!!! Their managers are being very supportive of this challenge, as they also do not get corroborative information from wages to be able to answer qeries their staff have about payments.

Debs has lodged a formal grievance and is now waiting for the council to come back to her with a written statement of her wages and pay for the past two years.

So, she really is not at fault here.

thanks again