Payroll people ?

[LiveWhatULove]

My employer, a community hospital was purchased by a larger healthcare system. They are really struggling with this acquisition.

They underpaid me for the last 6 weeks (paid every 2 weeks, so 3 pay cycles).

And today, it seems they have paid my back pay, YAY!! but also now have overpaid me, by about $5000, *sigh*

I have emailed them to alert them, obviously, I absolutely do NOT expect to keep the money. But honestly, I have lost trust in them, and want to know — can they withdraw money from my bank account? Or what is the safest way to rectify this situation? If this is your jam, how would you fix this?

[WellPreserved]

My employer, a community hospital was purchased by a larger healthcare system. They are really struggling with this acquisition.

They underpaid me for the last 6 weeks (paid every 2 weeks, so 3 pay cycles).

And today, it seems they have paid my back pay, YAY!! but also now have overpaid me, by about $5000, *sigh*

I have emailed them to alert them, obviously, I absolutely do NOT expect to keep the money. But honestly, I have lost trust in them, and want to know — can they withdraw money from my bank account? Or what is the safest way to rectify this situation? If this is your jam, how would you fix this?

Most small businesses use a third party payroll processor so I don't know if this will apply to a company that uses their own, but no, they can't withdraw money from your account but can withhold that money from your subsequent pay until the money is repaid, if that makes sense. The banking connection between your bank and payroll only allows for money in, not money out.

[Traci_Momof2]

They can't take money out of your account unless you've specifically signed something to give them that authority. A typical direct deposit ONLY gives them the info to put money into your account. Taking money out is a whole separate authorization.

I asked my boss, a CPA, about this type of situation. Legally they are entitled to that money back. As far as what authority controls that, he said the IRS doesn't care about that type of thing and the Labor Board usually only cares about protecting the employee, not the employer. So if anything to go down a legal route, (I know you said you intend to pay it back, I'm just putting out info here) it would be a civil suit kind of thing.

Here's what you need to be careful about: Since that $5K was given to you through a paycheck, the taxes and everything have already been calc'd and paid on it. So if they then deduct $5K from so many future paychecks then it should work out ok. However, if they just ask for you to write them a check for the overpayment, that doesn't take care of the taxes and that overpayment could still show up on your W2 at the end of the year. That's what you need to think about, is the taxes and the total reported income.

To be fair, I get it. This week I had a situation where my coworker is out of the office so I had to do one of her payrolls, so one I'm not used to doing. And each of our clients reports their hours and pay a little differently and I misinterpreted how they were reporting some things and got a couple checks wrong. So then I had to fix my mistake. It happens. But the point is, when dealing with payroll, there is a right way and a wrong way to fix mistakes. And IMO the easiest way is however much GROSS pay they overpaid you, they should deduct that from so many future checks (we would spread it out so someone doesn't go completely without pay for a time) from the GROSS pay and then in the end the taxes fix themselves. Either way be sure to track it all yourself so that at the end of the year when you get your W2 you can double check it to make sure it seems accurate.

Let me know if you have any further questions.

[Anonymous 1]

I worked for a city government and we could pull payroll payments back, up until a certain time before the payday.

[Olioxenfree]

Usually when that happens they would withhold the difference from your next paycheck.

[Anonymous 2]

Is it possible they messed up on the tax withholdings and the 5 grand is the difference?

I was paid twice for my training at my current job. My original store manager lied to me and told me the multi billion dollar corporation I work for "could not afford" to pay me for my training. I went to HR who paid me, in the meantime despite telling me I wouldn't be paid the store manager put the hours on my paycheck, so I was paid double. HR told me to keep it.

[LiveWhatULove]

They can't take money out of your account unless you've specifically signed something to give them that authority. A typical direct deposit ONLY gives them the info to put money into your account. Taking money out is a whole separate authorization.

I asked my boss, a CPA, about this type of situation. Legally they are entitled to that money back. As far as what authority controls that, he said the IRS doesn't care about that type of thing and the Labor Board usually only cares about protecting the employee, not the employer. So if anything to go down a legal route, (I know you said you intend to pay it back, I'm just putting out info here) it would be a civil suit kind of thing.

Here's what you need to be careful about: Since that $5K was given to you through a paycheck, the taxes and everything have already been calc'd and paid on it. So if they then deduct $5K from so many future paychecks then it should work out ok. However, if they just ask for you to write them a check for the overpayment, that doesn't take care of the taxes and that overpayment could still show up on your W2 at the end of the year. That's what you need to think about, is the taxes and the total reported income.

To be fair, I get it. This week I had a situation where my coworker is out of the office so I had to do one of her payrolls, so one I'm not used to doing. And each of our clients reports their hours and pay a little differently and I misinterpreted how they were reporting some things and got a couple checks wrong. So then I had to fix my mistake. It happens. But the point is, when dealing with payroll, there is a right way and a wrong way to fix mistakes. And IMO the easiest way is however much GROSS pay they overpaid you, they should deduct that from so many future checks (we would spread it out so someone doesn't go completely without pay for a time) from the GROSS pay and then in the end the taxes fix themselves. Either way be sure to track it all yourself so that at the end of the year when you get your W2 you can double check it to make sure it seems accurate.

Let me know if you have any further questions.

Thanks so much for the advice.

[LiveWhatULove]

Is it possible they messed up on the tax withholdings and the 5 grand is the difference?

I was paid twice for my training at my current job. My original store manager lied to me and told me the multi billion dollar corporation I work for "could not afford" to pay me for my training. I went to HR who paid me, in the meantime despite telling me I wouldn't be paid the store manager put the hours on my paycheck, so I was paid double. HR told me to keep it.

Good thought, but I do not think that is the issue, unfortunately.

[LiveWhatULove]

Usually when that happens they would withhold the difference from your next paycheck.

Lolz, well, it’s my part-time job, so it’d be a a couple of my next paychecks!

[Anonymous 3]

Personally I'd put the money into savings and let it collect interest until they wanted it back. I've had my company underpay me by a few dollars. It's made up on the next paycheck so as others said perhaps they'll take it out of your next one or something.