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Deductions to correct wage overpayment are probably legal

A company doesn't need your permission to correct

A company doesn't need your permission to correct an overpayment, but how it does so is subject to some regulations. Credit: Getty Images / iStockphoto

DEAR CARRIE: My employer overpaid me by six hours and recouped the money by deducting from my weekly pay over two weeks. But it did so without my written permission. Is this legal? I checked on the state Labor Department website, but the information seemed vague. — Questionable Deductions

DEAR QUESTIONABLE: The company doesn't need your permission to correct the overpayment. 

"When an employer mistakenly overpays an employee, it does not need the employee’s written permission to recoup the overpayment," said employment attorney Richard Kass, a partner at Bond, Schoeneck & King in Manhattan. 

Still, the employer would be subject to some regulations.

"In New York, the employer must give the employee advance written notice of how it calculates the overpayment and how it intends to recoup it, and the employee must have an opportunity to object if he or she believes the employer is acting unfairly," Kass said. "Detailed regulations determine how much the employer can recoup each pay period, how much advance notice must be given, what information must be contained in that notice, how much time the employee has to object, and how objections must be considered."

That notice should be given at least three days before the deductions begin, he said. 

And if an employee contests the company's overpayment findings, the employer has to hold off making the deductions.

"Recoupments cannot be deducted while the dispute resolution process is still going on," Kass said. 

So if your employer met the above requirements, the deductions were probably legal. 

"In the case of the reader," Kass said, "since the amount of the error appears to be small compared to the employee’s weekly pay, the employer acted properly as long as it gave the employee the required written notice at least three days before the first deduction was made, and the employee did not submit a timely objection."  

DEAR CARRIE: I was recently fired from my job because I complained about not being paid for all the hours I worked. For example, a half-hour was deducted from my pay for lunch breaks, but I never got to take one. During my first 10 years as an employee, the company had no time clock. And even though I often worked 55 hours a week, I was routinely paid for just 48 hours. After installing  a time clock, the company still paid whatever it wanted, regardless of what the time cards indicated. When I complained, my boss threatened to have me deported, even though I am a legal resident. I called numerous people for help, but it seemed that no one wanted to get involved. Please help. — Dollars Short

DEAR DOLLARS: You should call the  U.S. Labor Department right away at 516-338-1890 or 212-264-8185. 

If you were an hourly employee, the employer, by law, had to pay you for all the time you worked. That includes your lunch hour if you worked through it.

And you should have earned an overtime rate of one and one-half times your regular hourly rate when you worked more than 40 hours a week.

As for the deportation threats, even if you were undocumented, the company would have to pay you what you rightfully earned. That's because all employees are covered by the federal Fair Labor Standards Act, regardless of their immigration status. Threats of deportation to keep an employee from complaining about underpayments would be an additional violation. And for the record, the U.S. Labor  Department's Wage and Hour Division, which enforces wage standards, doesn't share information with Immigration and Customs Enforcement, or ICE, based on a memorandum of understanding between the two entities. 

Go to for more on state laws and wage deductions for overpayments.

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