Incorrect Wage Payment
Any employer can sometimes miscalculate the wages for its employee(s). This can either lead to underpayment or overpayment. The remedy is different in each case.
- The City cannot unilaterally deduct the overpayment amount from an employee’s check as this constitutes an illegal garnishment of wages.
- The City must document the overpayment.
- The City must negotiate a mutually acceptable and reasonable repayment schedule with the employee.
- These issues were addressed by the State Supreme Court in 1989.
The rules are somewhat different in the two cases because the employer is assumed to have the proper amounts of money available to compensate its employees in accordance with its labor contract. The employee, on the other hand, is not assumed to have a reservoir of cash to immediately repay an overpayment of which the employee may not have been aware. The best way to avoid any problems is to check your pay stub each pay period and ask questions if something seems incorrect.