In law, your employer/agency is allowed to recover an overpayment from your wages in full, unless your contract or policy states otherwise. However, recouping an overpayment in this way is often not reasonable. For example: if you have been overpaid £100 a month over the last 6 months, it would not be reasonable for the employer to then deduct £600 from the next month’s salary.
It could put you in financial difficulty and have serious consequences for your mortgage/rent and other outgoings.
The RCN believes that employers should act reasonably and negotiate a repayment plan that is agreeable to both parties. In our experience, the majority of overpayment issues can be resolved reasonably without the need for RCN support.
If you are overpaid, follow these steps:
|Step 1: Ask for more time and more detail
||Request that no deductions are made at this stage and check your contract and policies. Often large employers have an overpayment policy. Ask your employer in writing for a full breakdown of the overpayment including dates and amounts. Copy in your Human Resources (HR) team and payroll if you have them. You can do this using our Step 1 letter template. If your employer refuses to give you a full written breakdown, or has acted unreasonably, go to Step 5.
Step 2: Check the breakdown of the overpayment.
Once received, check these details carefully against your own records. Most employers will have a document that explains your pay slip. Read this and check. Do you agree that an overpayment has been made and do you agree with the amount owed? If ‘yes’ go to Step 3, if ‘no’ go to Step 4.
|Step 3: If you agree with the overpayment – negotiate a repayment plan.
Often an employer will only accept a financial repayment but think about other options that might be beneficial, such as working an extra shift each week or staying later each day. The aim is to agree a repayment schedule that works for both of you.
If your employer will only accept a financial repayment, consider your earnings and outgoings carefully. Work out what you can afford to pay back monthly and discuss this with the employer, HR and payroll. You may need to provide a breakdown of your earnings (income and outgoings) to help in your discussions. You can use our Step 3 letter template and view our example.
|Step 4: If you disagree with the overpayment – write again.
|| If you disagree with the overpayment put this in writing to the employer/agency. Clearly state why you disagree and again ask for clarification. Ask again that no deductions are made at this time. If you are still in dispute after this attempt go to Step 5.
| Step 5: RCN Support
Most overpayment of wages issues can be resolved amicably. However if;
• you are in dispute with your employer/agency
• they will not accept your repayment proposal, and/or
• you are in financial difficulty,
ask that they still do not recover any amounts while you seek further advice and call us on 0345 7726100 for support. We can discuss the options with you. If the repayment plan is an issue, we can offer advice on negotiating a repayment plan with your employer/agency and any other creditors.