Is there a time limit within which an employer must recoup a wage overpayment?

Author: Alice Gilman

No. There is no time limit in the Internal Revenue Code within which an employer must recoup a wage overpayment. However, any given state's wage payment law may include a time limit. Under the Fair Labor Standards Act, an employee has two years to file a lawsuit against an employer for unpaid wages or overtime, but it is unclear whether this would apply to an employer's action to recoup overpaid wages.