Employer Wants Overpayment Back After 4 Plus Years

texasbas · PayPerShop Newbie Joined: 16 Oct 2006 Posts: 1

My husband was on foreign assignment (in Holland Jan. 2001- August 2003) where the company paid foreign taxes, although hypothetical taxes were taken out of his check. In March 2006 (first correspondence), he was notified by his employer (state of Texas) of a tax refund mistake, which was paid directly to my husband by the foreign government, and he was told he would have to pay the money back to the company after 4 years. Now October 2006, the company wants him to pay back lump sum or dock his pay. Is there a specific time period where a company does not have the right to require an employee to pay back any type of overpayment..........it has been 4 plus years they are trying to go back. Is he obligated to pay money back?

Ian Congreave

Wecome to the PayPerShop forum and thank you for posting your question.

Here in the UK, where I live and work, I doubt whether any court would uphold a deduction from wages to recover an overpayment that occurred four years earlier. Our courts would take the view that the employee was entitled, without any communication from the employer during the four years, to believe that the payment was genuine.

In the US, the federal laws that have some application here are the wage garnishments provisions of the Consumer Protection Credit Act. For information about this, see http://www.dol.gov/compliance/guide/garnish.htm#EmplRights.

Information about the Texas Payday Law is available at http://www.twc.state.tx.us/ui/lablaw/pdlsum.html. That law appears to provide some protection for employees who are not paid all of the wages due to them.

As I am not an expert on US labor laws, I hesitate to comment further on how these laws work. My best advice would be to obtain legal advice from a lawyer or a local law advice centre.

We will highlight your question in next week's US newsletter and perhaps we can get some further advice from those with more direct experience of wage deductions.
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Ian Congreave, PayPerShop owner

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