Can a previous employer collect an overpayment of vacation hours 6 months after leaving the company?
Jenni’lynn asked:
My husband and I took a 3 week vacation this past summer. Prior to leaving on our trip he sent in his letter of resignation, upon our return he would be accepting another job at a different company. His last paycheck from his previous employer was basically ALL his vacation pay…
So, NOW, 6 months later he just received an email informing him that they, by mistake, made an overpayment of vacation hours and they are asking us to repay a fairly large sum of money. Do they have any legal recourse?
My husband and I took a 3 week vacation this past summer. Prior to leaving on our trip he sent in his letter of resignation, upon our return he would be accepting another job at a different company. His last paycheck from his previous employer was basically ALL his vacation pay…
So, NOW, 6 months later he just received an email informing him that they, by mistake, made an overpayment of vacation hours and they are asking us to repay a fairly large sum of money. Do they have any legal recourse?
Did they threaten him with legal action? Because I think that unless he voluntarily sends them that money, they are out of luck. I can’t SWEAR to that, but there are a lot of lawyers in the phone book. Tell him to call some and get their opinions. It won’t cost anything to ask one question over the phone.
When our mother passed away, we went to her bank and closed her accounts. We didn’t know the balances, and of course they couldn’t hand us the money without the power of attorney, which we had but not with us. We sent them the paperwork and they sent us a check. It wasn’t a large check, so we suspected nothing.
The next year at tax time, we got a letter saying we owed the bank so much money, because she was on Social Security, and they had made a deposit AFTER we closed the account, and that if they didn’t get that money back, they were going to take my sister’s tax refund. I called a lot of lawyers. Because we had no idea what the balance was in the first place, and because we had paperwork showing that the BANK accepted the Social Security check after the account was closed, we didn’t have to pay it back, SO…don’t let the old employer bully you. They’ll SAY all kinds of threatening things, but talk to a lawyer (or even several) and see if this employer has any real leg to stand on. It was THEIR mistake, not yours. Good luck!
I’d talk to a lawyer. Common sence says if he rec’d payment for something he did not earn (rec’d vacation pay for time he did not earn) then yes, the company can ask to be reimbursed.
Whether they can come back 6 months later and suddenly ask to be reimbursed - I dont know.
I’m not an attorney and its just my opinion.
after 6 months i believe they could not legal have anything to stand on since there records are the only real records.
the courts will believe there are just hard feelings from old company.
Yes, they have a right to get the money back. Lets say they made and accounting error and gave him a check for $1,000,000. You would have to return that money, right? It is not legally yours. The only possible chance you have to keep the money is if there is a statute of limitation on the time frame the company has to request the money… I doubt it is anything less then a year.
There is one other possible recourse you have. Are the vacation days given to him at the beginning of the year or is it accrued throughout the year? If it is accrued, again, you have to pay it back. Sorry, not the answers you wanted.
Of course they can ask for repayment - it was money your husband should not have received. I don’t believe there is any statute of limitations on how long they have before they notice the mistake. It may be that they just completed an audit, and that is how it came to be discovered.
Since the payment was in error, it should be repaid - keeping the money is just the same as stealing it. They may not sue, but it is possible that they could send it to collections and it could impact credit, and it would certainly be an issue if he ever needs to use that company as a reference.
DISCLAIMER: ALTHOUGH I AM A LAWYER, I AM A CRIMINAL LAWYER AND THIS IS TOTALLY NOT MY CUP OF TEA. But I did some research into the relevant case law and statutory authority on point and this is what I came up with:
The claim against your husband would be for unjust enrichment. The question is whether he received something that he did not earn. Under CA state labor laws, vacation time VESTED is the same as wages and pursuant to labor code section 221:
The law says: No taking back wages earned and paid: It shall be unlawful for any employer to collect or receive from an employee any part of wages theretofore paid by said employer to said employee. [ Lab.C. ยง 221]
Wages are defined broadly to include all amounts for labor performed … This definition makes it clear that the statute prevents an employer from taking back wages earned and paid (as opposed to overpayments of wages not earned) . [See Harris v. Investor's Business Daily, Inc. (2006) 138 CA4th 28, 40, 41 CR3d 108, 117]
***If your husband was paid out for vacation time he did not yet accrue and which was not yet vested, the company may file a claim for unjust enrichment against him and may seek reimbursement for that amount. If the amount is more than $7,500, the action would take place in a Superior Court as opposed to Small Claims court. You would have to hire a lawyer to defend your action.
You can attempt to negotiate with the company and demand that they allow you to deduct any money you paid for taxes on the amount earned and any other losses you may have suffered as a result of their mistake.