Should an employer accept an employee's uncashed paycheck from a prior year as reimbursement for a wage overpayment that occurred in the current year?

Author: Alice Gilman

Regardless of whether the employee cashed the check, as long as the funds were set aside for the employee's use the employee had constructive receipt of it, and the employer must have reported the amount on the employee's Form W-2, Wage and Tax Statement, for the year in which the employee received it. The employer must initiate a wage repayment plan that is predicated on the fact that the overpayment and the repayment were made in different calendar years.