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Deduct from pay for HR payroll error?

coloradospecialdistrictscoloradospecialdistricts 22 Posts
in Compensation Vote Up0Vote Down
This is an interesting dilemma.

HR hasn't been deducting from an employee's paycheck for 9 months for spouse health care. In addition, HR just discovered that the employee has been erroneously paid at a higher wage than she was supposed to be working at...also for 9 months. HR argues the employee should have noticed that she was being paid too much and that deductions were not taken out for her spouse's insurance coverage, so the employee is partly to "blame" for the error continuing. Management has proposed that the employee "pay back" the money through deductions from her paycheck for the next year. Is this legal?
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  • 5 Comments sorted by Votes Date Added
  • ShadowfaxShadowfax 910 Posts
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    In Mi by statute, e/er can deduct up to 15%of wage to correct an overpaymetn error BUT not to reduce gross wages below minimum wage AND limited to a 6 month look back. This should be a matter of Col law, be sure to comply precisely. I mi the notice to take deduction for error mjust come thepay period before, and all the calculations are made AFTER the usual w/holding and fringe ben. deductions.
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  • radrad 1,163 Posts
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    Oh, I have seen this before. Employee received a night differential for a year before it was caught, and he had to know he was getting the extra money because paycheck says "Night Differential" right on it. We deduct overpayments ten percent of the total per pay period until the full amount is satisfied. Regardless of who is to blame, employee was overpaid.
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  • coloradospecialdistrictscoloradospecialdistricts 22 Posts
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    thanks. I was concerned there might be some vested right iissues. Sounds like those that have had this come up have dealt with as we are. I appreciate the posts!
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  • Down_the_MiddleDown_the_Middle 771 Posts
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    If the spouse did not access any health coverage for that period, you might find it acceptable to call it a wash and treat it as though no payment was ever made. My guess is that it won't be that easy, but.......... It's always difficult getting people to pay for retro services they didn't use. The wage overpayment s/b corrected and doing it over an extended time frame certainly sounds reasonable. The bigger question is what has been done to minimize the errors from reappearing in the future????
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  • Don DDon D 9,834 Posts
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    Scuse me? "Vested Right Issue"? Get back what belongs to the company.
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