Recoup a Wage Overpayment
When to Use This Flowchart
Use the Recoup a Wage Overpayment flowchart to properly recoup overpaid wages from an employee.
An overpayment of wages can occur for many different reasons. For example, it may be the result of inaccurate or delayed payroll processing, inaccurate accruals upon an employee's termination, payroll system failure or even clerical error. Regardless of the reason, an employer is entitled to recover an overpayment in full in a reasonable and timely manner.
When recouping a wage overpayment, an employer must comply with both federal and state law and its own internal policies. An employer's failure to carefully comply could lead to potential civil and/or criminal liability.
This flowchart takes an employer through the steps of recovering a wage overpayment, from creating a written recoupment plan to properly calculating and executing the recoupment.
- May an employer execute a recoupment?
- Create a written recoupment plan.
- Is the recoupment in dispute?
- Execute the recoupment.