What to do if you have overpaid an employee

 

When it comes to running a successful business, there is a chance that you are going to need to hire some employees to help you on the way. This means that you need to take charge of paying these employees their salaries.

In the most part this process is relatively pain free and goes without a hitch, yet sometimes it doesn’t always go to plan.  You could end up under paying your staff, paying late, or perhaps overpaying your stuff.

So what should you do if you overpay an employee?

How do overpayments happen?

Exactly how does an employee overpayment happen? There are a variety of different reasons. It can come occur due to a lapse in concentration from someone in payroll, or perhaps a computer error whilst processing the payment.

If the employee is still currently employed by you, then legally you are able to make a deduction from the subsequent wages of the employee. However, whilst legally you can do this, it may cause your employee undue stress and leave them with some issues.

How can I reclaim the overpayment?

How can you reclaim an overpayment in wages that have been sent through to a member of staff? The first thing that you should always do is discuss the issue with the employee before any action is taken.

Tell them that they have received an overpayment and that you will be reclaiming the money back in their next wage. It is important that you confirm with them that this won’t cause them any financial difficulty.

If it is likely that it will, then you will need to work with them to formulate a payment plan that is not only going to recover the money efficiently for you, but also work within their financial constraints too.

What about if they no longer work for me?

If it happens at all, then hopefully the overpayment of wages is to a current employee, as this makes the process all the easier. However, there are circumstances where you may realise that you have overpaid a previous employee.

This can make the process all the more complicated. Although not impossible. The first port of call is always to contact them to let them know that they received an overpayment and the details of this. If this has no joy, or if you are not sure on how you can best contact them, then you are going to need to speak to a debt specialist in order to collect the money that they have been incorrectly paid.