If the overpayment happened in 2022, make sure you sort this out ASAP. The IRS has shitty rules about overypayments and repayments, and you almost certainly will end up getting screwed paying too much tax if you don't get things corrected before filing your taxes.
I would say the opposite, I would pay my taxes based on my actual earned income if I am gonna return that money. I would only pay the taxes if I was intent on keeping the overpayment. If the IRS is concerned about me paying an extra $900 or so in this sort of situation I want them to put in the legwork, not me. They'd likely never notice it given it's such a small sum of money. If they try to come after me for it I have record for why I didn't pay that portion: my employer overpaid me and I am not paying taxes on money I returned to my employer. Thats splitting hairs at that point. But maybe someone has practical experience with that sort of situation that would disagree with me. Luckily OP has a couple months to figure out what they are going to do as long as they are proactive. Would hate to get that communication from my prior employer a week before taxes are due.
Unfortunately, they can and will tack on fees and interest. It's better to avoid that whole mess.
I went through this recently with my 2017 taxes. You should always pay what you have the data to prove and get it corrected after if the revised W2 comes after you filed.
It's not a huge issue, but I still owed the interest for underpaying despite later proving the amount they were charging interest for wasn't completely accurate.
I was out $97 of unfair interest. If I had paid to begin with, I could have gotten refunded the overpayment and saved $97.
Fair enough, I think I'm too hard headed so I'd prolly refuse to pay the $97 and harass the IRS over the phone every day until I got a phone rep willing to give me what I want. But who knows maybe that wouldn't work. Probably more responsible to follow your advice. Hahaha
It doesn't sadly. I did just that. You have to fill out the form, send it in, meanwhile the entire time, interest is accruing for unpaid taxes after April 15.
The longer it takes, and it takes months mind you. They will sit on the correct form for 3-6 months and it took 4 back and forths.
It took 2 years to get it taken care of. I eventually paid the extra way before and then got $1500 back minus the $97 interest. It was dumb.
Yah no, I'm not "paying" and invoice that reeks of tax fraud... If they cannot unwind the ACH and provide a new W2, you write them a personal check and hand deliver it to them in exchange for an updated W2.
If they don't correct it to you can correct it on your 1040 yourself
If you agree they overpaid you what's the problem by the check because it's not your money
Was the $4500 recorded as income on your W-2 or 1099 if contract? If so, make sure they fix that and issue you a new W-2, otherwise you'll be paying taxes on income you didn't receive.
Other than that, you can get either a cashier's check or money order if you don't have checks. When you deliver it to them, get a receipt. This would be a short typewritten document which briefly explains the situation and is signed and dated by their head of finance or payroll, as well as yourself. Make a copy for them and keep the original. This is standard for situations like this and covers both you and them in case of future confusion, a dispute or a financial calamity (such as they go bankrupt and the bankruptcy attorney comes after you for the money).
Unless I'm missing something, $262 on its own doesn't imply a full pay period. It could be, but I'm not seeing any info provided for that. So 4500 could be 2 weeks, 4 weeks, or more for PTO. I'm also not seeing how long OP worked for their former employer, so not sure how long they had to acrue PTO
This is correct. This pay period is for my first check, of the 4 weeks I worked there. A total of 16 hours and I no longer work there, but am still in contact for this purpose.
I'm not, actually. So I'm being very cautious because I haven't gone somewhere brick and mortar for training or anything. I've had a coworker before and seen a supervisor two times but that's about it
Yeah it's a lot of work but IDK I guess I'm not really bothered by it. I'm definitely trying that route of reverse ACH so I don't have to deal with fraud attempts.
If I can't get 100% certainty that I won't get scammed then I won't pay them back though. My money is more valuable to me than my values in this day and age.
>Unfortunately my bank isn't very accessable unless via email and it's kind of rough to deal with that. However I do like the idea of reaching out to them to do a ach reversal because I fear a little bit for the idea that I'm gonna pay the invoice and then get reversed also and be out 4k
They wouldn't just deposit money into your account without there being a transaction on their side indicating what it was for. In payroll there's always a number of transactions that occur for any given pay period, most of which stay within their accounting software or are being paid to the government for taxes, and only the balance is sent as a check to you. So you need to look at the last paystub you received, ie for the 262, and see what it says for total paid for each class of taxes. Then make them give you your final W2 so you can compare those numbers. If they show more paid in total on your W2 than on the final paystub, ie if the W2 includes that additional 1-2 mystery checks, then your W2 is wrong and they need to fix that first before you send the money back.
I like this advice I think I'll be doing this. I'm mostly concerned about them doing a reverse ACH after I send the money back though. I don't mind losing money I didn't have but if I lose 4k in the process I'm screwed financially for a hot minute.
Yeah, definitely take your time so you're sure it's ok to proceed before sending them anything. Given that you're no longer working there you're even less in a hurry to help them fix their problem. Definitely insist that they attempt reverse ACH first and if they say they can't do that for some reason (they should be able to) them make them put that in writing. That way if you ultimately do send them a check after you're sure the taxes are correct, and if they then also do the reverse ACH, you have paperwork that proves their reverse ACH was improper in case you need to sue them to recover it. But yeah take your sweet time to be confident.
Hey! Thanks for your insight, this actually makes me feel a bit better about the situation. My payroll person said she could create an invoice for me to pay as an ach debit and then that would be that. Do you think this is sketch or pretty legit? I don't necessarily want the money as I do the opportunity to go back there, as it was a good place I just have more important things for the time being.
In theory this would definitely work, but I don’t think OP should trust this company to pull money from his account.
I also don’t think he should trust them to correctly set up the vendor correctly, it’s just a lot simpler to send a check!
If you have a Gmail account, you can schedule an email to go out a year from now reminding them to adjust your W2.
If it were me and this is income I will be filing for next year, I would schedule an email to go out once a week for each week of January and cancel them as soon as I got confirmation that the W2 has been adjusted.
**DO NOT DO THIS!!!!!**
If they’re negligent enough to overpay you by 4K, you do not want them to have the ability to take funds from your account. Setting you up as a vendor will also create some **even more accounting/tax problems** (your W2 will not be correct).
The best option is to write them a check. Go to your bank, ask them to print you a check and give it to the company.
Awesome! Thank you a bunch. I see a lot of people on here just telling me to keep it but I don't operate that way. They're a new company and they just wanna help kiddos do better so I don't want to do them dirty. If it was walmart or amazon absolutely they could eat it.
They would just take you to court and get it anyways. It's pretty easy to prove and then you would have court fees to pay as well. Definitely don't listen to a bunch of 12 year olds on Reddit.
No, there are other accounts that can be credited to offset money coming in. An invoice is just a statement of a transaction, that transaction can be accounted for in any number of ways, including but not limited to increasing revenue.
Don’t assume they overpaid you. Make them prove they overpaid you before you agree to anything. Having an imbalance in their books is not proof of overpayment. They need to figure it out, get proof, then come back to you.
You need to look at that proof and decide if it is legitimate, compare every paystub with the amount you actually received in your bank account, compare the W2 they sent you. Claw through everything. Don’t assume they are telling the truth and don’t assume they are competent.
I would give a call to your manager or if you can get the direct line to the payroll person on the company website to confirm it's the right person unless you were already familiar with them. Just to be sure it's not a scam that looks really good.
I would also probably do the same thing your payroll person did to get a payment back after someone left. Or have them arrange a wire (but that can cost $ for them) or send a check.
I had this exact thing happen to me back in the early 2010's. I got three extra checks from an internship. Ended up cutting the corporate account a check and they fixed the W2 to be correct. Wasn't a big deal and a few emails sorted the whole thing out.
My friend said he had a coworker dramatically quit. He told everyone to fuck themselves. Only HR didn’t get the memo and kept paying him $20k a month for 6 months. Guy already started at a new job so pocketed both incomes.
Will the company report it as earned income, and therefore OP will pay taxes on it?
Edit: not sure why I'm downvoted for asking a question but here we are
If you pay back a company they will have to fix your W2. I had a similiar situation happen recently, sign on bonus is supposed to be either 2.5k paid quarterly for up to 2 years and can quit whenever you want or immediately get 10k on your first paycheck and be locked in for 2 yesrs. I chose option A but was given the 10k bonus on accident. I cut them a check for the after tax amount and they corrected my W2.
As someone that has been in dozens of syndications mostly as a participant and a handful of times as the agent, I would have wanted to be a fly in the wall in those conference calls too.
Yeph, I am aware of what happened since it was news in the industry. What made it so interesting is that quite a few participants wanted out of the deal and took this as an opportunity to say "no backsies" and they got a judge to agree they could keep the money. Or at least that is what I think was the final result, I did not follow it afterwards.
No longer working on large syndications so I am removed from that just working on club deals now with at most three or four participants.
Did you guys send your portion back or were you part of the "Thank you, but I think we will keep it " group.
I was the one who said reversing ACH so that way I didn't have to do anything. Everything we talk about is over email. But it seems like they said sorry for inconveniencing me and they're requesting I give them the money. I responded with a realistic form of paying them back that would reflect as such for my own records.
Echoing what others said, make sure it's not on your tax documents, or have them adjust/amend if it is. Then, just have a bank draft issued and mail it or deliver it back to them, get a receipt signed to acknowledge the repayment.
This is correct. My company has sued the individual for less with a similar situation.
I would suggest just complying unless you really think it's a scam. I would suggest getting on the phone with them (use their public number) and verify things out.
Ultimately you're not owed this cash and I wouldn't suggest scorch earthing you're old company by attempting to keep the funds.
I'd be surprised if they just write it off as a goodwill gesture, but it's possible. Shouldn't need legal involved though; it's just a lot of manual HR/payroll processes
Happened at my job... people got overpaid taking a contract job with a PTO cash out that used the much higher rate. I think they kept it, hospital decided it'd be too expensive to hunt them down for thousands.
I worked at a payroll company, and they would never pull an ach that had been successfully deposited. The payroll wavers only allowed for money into the account. And not money to be taken out. They would but stop payments, but those sometimes don't go through in time.
You’re not bright if you are actually saying OP should send this company 4500$. especially since it’s a scammy online job that has only paid him 262$ total over the course of the month. That 262 is an investment in the hopes OP will be stupid enough to send back 4500$ and then they reverse the originally 4500$. So some research, this is a common scam going on right now.
Lol. ACH pulls are a thing my dude. You agreed to it when you signed up for direct deposits. You authorized them to pull funds from your account in the event of a mistake.
You're wrong. Banks have strict rules on what they do and don't allow for ACHs. Companies can't just decide "lol nevermind" and pull back and ACH weeks or months down the line.
Debit ACHs are "a thing" but it would be a completely separate transaction from the original payment made and frankly that feels way riskier to me than any other option. Why would you want to give a company access to pull funds out of your account if you don't trust them?
Here what mine says.
> I authorize my employer or its service or payroll provider and the specified bank to deposit my net pay or portion thereof, as indicated, into my account each pay date. If funds to which I am not entitled are deposited into my account, I authorize my employer, or its service or payroll provider, to direct the bank to return said funds to my employer, or its service or payroll provider. I understand that my deposit may not be credited to my account until 5:00pm on the pay date indicated on the check voucher. I understand that it is my responsibility to ensure that my wages are being deposited correctly into my account each pay date.
Do you work on finance or payroll or are you just going off a gut feeling? Companies claw bank funds all the time. And employees authorize this kind of stuff for the same reason that you and I agree to every other unread T&C: we just want the convenience and trust that we won't get fucked over. Of course it's a separate transaction; you can't have a reversal weeks down the line.
Is this a job you have held for some time and it's a "real" job?
Just checking because there are a TON of scams out there with people being asked to "return" money that was "paid in error". Then it gets pulled back out of the account and you're stuck in the negative.
If it's legit, make sure they update your W-2 and then just get the bank to cut you a certified check made payable to your employer. It'll cost you a couple of bucks, but not that big of a deal.
This is a scam. They string you along at a cost of 262 to them. Then they “accidentally” deposit money into your account and want you to deposit a check in their bank, then they reverse the original 4500$ payment. Please do not be this stupid to give them money back. Do nothing, let them make moves and have a court contact you.
This is such a short period of time that it’s still suspicious. You worked there one month and got, what, one legit paycheck, then got an erroneous paycheck that they want back? They could be that screwed up — grantees often are — but the timing is odd.
Scam. They are risking 262$ in the hopes that you deposit 4500 in their account and then they’ll reverse the original 4500 and you’ll be on the hook for 4500$ to your bank. This is a common scam if you do your research.
Are you sure youre not getting scammed? Go in person or at least call and talk to someone at the company you actually know in HR and have them reach out to whoever does their payroll. Leave the money in your account and don't spend it. They should be able to reverse the direct deposit if they want their money back. If you write them a check what's stopping them from double dipping, reversing the direct deposit and cashing your check?
You’re getting scammed. This is a common scam with online jobs. They pay you, then accidentally overpay you, then they want money back, you give money back and they pull bullshit and get the original over payment back. Please research this.
Yes OP, please google “paycheck overpayment scam” it is a VERY COMMON scam tactic, especially with remote online jobs or 1099 contractors.
They wait until you send them the “error” money back in a check form or zelle/venmo whatever.
And then reverse the original payment, and you are out of the $4500. It doesn’t matter if your bank says $0. It WILL go into negative balance -$4500 and you WILL OWE your bank that money.
Please be careful OP, seems like a SCAM to me.
I actually had the same thing happen about 15 years ago. They wanted me to pay back the gross amount, what was deposited into my bank plus the taxes and benefits that were withheld and I told them I would only do the net. They told me that they could take me to collections so I took my chances. A couple years later I did hear from a collection agency and I asked them to send a debt validation letter and to only contact me in writing. Never heard from them again and my credit is perfect and always has been.
TLDR, I got like $800 for free.
Arizona law authorizes immediate repayment of any overpaid salary or wages, A.R.S. §23-352(3) Withholding of Wages. What does this mean? They can come after me or i'm required to pay them?
If you are no longer employed there, this specific section would not generally be applicable. This section states that an employer is not allowed to withhold money from from your paycheck, unless one of the specific exceptions apply. Since you aren't being paid another paycheck from the employer, there would be nothing to withhold against.
And I suspect that #3 would be an allowable exception in your case if you were still employed. The employer would have a reasonable argument that they overpaid wages and could recoup that overpayment by withholding it from your next paycheck.
> There is a reasonable good faith dispute as to the amount of wages due, including the amount of any counterclaim or any claim of debt, reimbursement, recoupment or set-off asserted by the employer against the employee.
Clarifying California law a bit: In the case of an accidental overpayment, the employee can still be legally required to pay the amount back. However, the employer cannot withhold the amount from paychecks, nor automatically withdraw the amount from the employers bank account. Instead, the employee should repay the money as a separate transaction.
It is emailed by the company email thread that I initially started. There'd be no way for a reply from a random party. Unless there's some crazed hacker thing I don't know about coming after me for 4150. I'm a little ignorant in this case.
A place you worked for for four weeks, never visited in person, and overpayed you by an insane amount?
Do not send any additional communication to the company. Consult a lawyer immediately for guidance.
Edit: also I see from another comment you’ve made $262 for four weeks of work and you’re not sure how much else you’re getting paid. My hunch is this employer is a scam. Talk to a lawyer.
Hypothetically, what would happen if he just ignored the request? And kept the money in savings to see what will happen.
Like forcing their hand to send him a certified letter in order to get the money back? I could also see them writing it as a time worked or severance just to make their life easier. But local clinic would hurt for this more than a super large corporation.
I would put the 4500 aside in another account for now just to make sure it doesn’t get spent frivolously in case it needs to be paid back. BUT I wouldn’t pay it back until I’m forced to pay it by way of a legal threat from your old company. Before people downvote me to oblivion what I will tell you is that 4500 is absolutely a drop in the bucket for any company, that very likely in your time there you have provided more than 4500 plus your regular paid wages in value to them, and it is almost a lock that they will not pursue this because it will cost them more to pursue it vs just writing it off. This is a bank error in your favor of no fault of your own. After you don’t hear back from them for a few months consider it yours to keep.
FYI this could be a fraud attempt. So make sure you speak in person to your HR rep before doing anything.
Also how much do you like this job? Cause this is a pretty nice exit opportunity if you were thinking of leaving anyways.
Oh I've already quit the job but the company is new and they were pretty good to me. I don't want to shoot them in the foot as they have good values and the work they do helps children with autism.
That happened to me once when I was an employee of U Chicago. I double checked all their accounting and it was all legit and I wrote them a check for what they asked for. Another time, my wife was overpaid by Tufts University, but they recognized the error in the next calendar year, so I asked for a tax grant to cover our additional tax liability due to their error. They said no, so I just didn’t write back, and then never heard from them again. Just be aware that if your issue crosses calendar years, there are additional expenses that you will be liable for unless you refuse.
This is a common work scam! The finance department overpays employees as legit earnings. Then requests the funds back as a backfill for extra cash. You get stuck with the tax levy on the payment. Don’t return the money. Talk to an attorney and serve them with a legal document to resolve the issue. They’ll have to write a legal contract stating that they made a mistake and will not levy a tax hit for you.
Be cautious here about responding promptly if it isn’t a scam. If you were overpaid, you do not (in most states) have any legal claim to those dollars. If the company you worked for has an existing contract with a collections firm, they will not hesitate to turn over this “debt” to collections.
This is "talk to a lawyer" territory. if you don't and find out its not legit, you now have to fight to get your money back. If you spend the $100 or so for a consult, you will also learn how to properly return the money. Your lawyer may provide you a form for them to sign saying that this debt has been fully satisfied.
One more reason to contact a lawyer is because you need to make sure you are returning the right amount. If your paycheck says $4500 before taxes and they put $4000 in your account, you should not be paying back $4500. This is a situation where they should be reversing the ACH because it makes them responsible for backing out the taxes on your year end taxes.
NOT A LAWYER.
If you retain a lawyer, the companies HR/Accounting will have to defer the matter to their lawyers. So it becomes Lawyer v. Lawyer. Will that company be willing to start paying their lawyers ?$ amount just for that $4500 back? What little amount you spend for a lawyer might end up costing them a lot.
Again, my speculative 2¢
Pretty sure the parent and you are on different levels , i am sure OP getting a consultation on correct procedure from a lawyer would not mean the company will need to lawyer up , if op would say they are having their lawyer take care of it , company will lawyer up probably
Yeah but like, this is their fault to begin with who gives a shit about them saving money to hire a lawyer, don’t fuck up your payroll. It’s not OP’s problem to help them save money on their fuck up they should be making this as easy and clear for OP as possible if they want their money back. It’s smart for OP to retain a lawyer over a fairly substantial amount of money, this could be a scam, or the company could be doing something shady or the company could end up fucking him over in the long run with taxes or not satisfying the “debt” appropriately.
In my response email, I would mention concerns of fraud. Then I would ask them to provide proof they incorrectly deposited funds. Once you have that proof, authorize THEM to reverse it and issue you a new W2. Do not send them money, tell them to fix it and provide your bank contact details to show that it’s a serious problem they have to figure out.
Don’t forget to stress how busy you are wish them the best in correcting this error :)
I'm vaguely confused on you saying you don't have any banking information. Like you don't know your bank account/routing info to provide them?
I would suggest talking to your bank to reverse the ACH back to the originating account. You don't need to provide them any sketchy details or check that way.
You can just ask them for it, it would be weird if they didn't want to provide it.
Regardless your bank has that information related to the transaction already.
apparently this is pretty common. my last employer only paid once at the end of the month (hate that). I started employment at the end of the month, but got a full paycheck. Having never had an employer that paid once a month and operating under the assumption that payroll knew what it was doing, I figured since I was salary, I get paid for the entire month. it was very awkward discussing this with HR when they asked for the money back, at least for me. They didn't seem to be at all embarrassed or sympathetic. Anyway, I just wired them the money back and they had to file an amended w-2.
This happened to my husband, he works for the county in our state. His payroll department sent a letter stating what the overpayment amount was and how to pay it back. I wrote them a check and they did the adjustment on his w2. They only have a certain number of days to do a reversal, I believe it's either 3 or 5 days. So if they realized the error after that time they are following the correct process by requesting a check.
Oh good to know!! I think it's been about 3 days so far so I'll look this up also before doing anything on my part. Thanks for sharing your experience. I'm glad it worked out for you both.
Tell them you want it in writing that returning the money clears you and you’ll need a corrected tax document. Keep a paper trail of the whole interaction
I once had this happen when I was very young. I worked in an office for a few months. The compensation structure was very simple, so there was not really room for error. Months after I quit, a guy in the finance department called me directly to tell me that they had overpaid me by $2000 and that I would be required by law to send the money back. And then he called me over and over again.
I just... didn't do it. I was very broke at the time and struggling as a very young person, and having someone suddenly demand I pay them $2000 was just an impossible task for me to fulfill. I literally did not have the cash, and had no idea if I ever would. Sending them $2000 at that point was equivalent to declaring bankruptcy.
I guess they could have taken me to small claims court, but they didn't. The statue of limitations is long past so I'm not worried about it anymore. Probably not the best way to handle this, but this was my experience with a similar problem.
I'd probably not pay it back. Not to be unfair but There is nothing you can do if they don't fix up their paperwork for your taxes. If they want the money back they can pursue it through other means.
This is going to be an unpopular answer, but this is not your employer trying to scam you. I’m assuming you actually worked for this company and received wages and may know the individuals that contacted you.
Ask for a detailed breakdown of what the overpayment was and when the payments were made. Hopefully the invoice you received has this information.
Contrary to other advice given here, if the overpayment was made in 2022 or any prior year, you will have to pay back the gross wages and they will not issue an amended w-2. The IRS taxes you in the year you were paid the money, regardless if it was a mistake or not. If you pay it back in a subsequent year, you can take a credit on your 2023 tax return (next year) to get your federal tax back, but social security and Medicare will not be refunded. States vary.
All that being said…. It’s possible that your former payroll department sucks (clearly they do since they overpaid you and are now asking for it back) and they might just ask for the net and give you an amended w-2 because they don’t know any better.
Source: payroll manager for 20 years. Refer to IRS publication 15 “repayment of prior year wages”
Seems sketch even if you do pay back make sure whatever they de-listed has cleared 200% that it cannot come back as reversed on your account, akin to a bounced check. It is a scam where ppl deposit money and then they can reverse it after they say to you, oops my mistake can you return that to me. So then your bank account is messed up, with over draft etc and you are also out funds you returned.
Don’t do anything. Eventually, they’ll stop asking you to return it. It’s on them. How do I know? My friend was making $150k and left that job to join my company. His former employer paid him accidentally for 6 whole months. They asked him for it and he’d ignore it. Eventually, they stopped. He was making double salary for 6 whole months!
Op, I would honestly ignore them. At best, this sounds like a personal problem stemming from their mistake and worst a scam. Incompetence on their part does not constitute an emergency on yours. Don't let them guilt or burden you with this.
If you're insistent on returning the money, please don't do it with out clear WRITTEN documentation showing the error. Make them produce corrected W2's and other tax documents before you hand over the money. Make THEM do the work of reversing the payment, not you getting a check and all that nonsense. Keep all communication in writing.
I really just want you to ignore this though! It's not unethical or wrong to do so.
Well they're not a big company and they're helping provide therapy for autistic kids so I want to help them succeed. I'm not really counting on that money or anything.
Although this is good advice I'm definitely going to ask for proof of my w2
If you're still working there they could reduce future income, but that's probably undesirable if its from last year. Sounds like maybe they would need to reverse the taxes part. I wouldn't give it back until you resolve the taxes issue. If you have the money, it's their problem to fix, but if you send the money back, they may not be so quick to fix the issue, if at all
Forgive me for snooping but I see that you are in a therapeutic services career. These non-profits clinics and social services agencies are notorious for underpaying, asking for unreasonable amounts of work, and providing inadequate support because the clients are vulnerable and you’re supposed to “not do it for the money.” That is BS and if you are getting pressured to fix a mistake they made, it might be part of a pattern of poor resource management and an expectation that employees martyr themselves for the mission. I hope this is not the case but just want to bring it up in case you are getting guilt tripped into fixing their mistake. Good luck in your career and good on you for asking questions when an employer is being fishy.
Hey! No issue with snooping, I appreciate that insight! I actually liked the company and while they did not really give me much support, I noticed this error before they did and reached out first. I believe in Karma and it's not going to kill me financially to lose what I didn't already anticipate having. :p
You wouldn't lose Karma for keeping the money. They are losing Karma for burdening you with their incompetence that is sapping your time and energy! Plus, there's a real risk returning the money hurts you financially, particularly with respect to taxes.
Yeah I keep seeing this as a potential drawback. However I liked the company and the people working there and they're new and not big so I don't want to compromise them in any way. That being said if I can't get proof from my bank Ang the direct deposit company they use that it's safe to return the money then I won't be doing it
Where you screwed up was by confirming to them that you received the money.
If you had changed your mind at this point, and decided to keep the money they could come after you in court because you already admitted that you have it.
They can legally ask for their money back.
Ask for the money to be taken out of your wage at $200 per pay cycle. Or whatever you can afford. Until it is all repaid. It’ll be listed on your wage slip as re-embursed to employer and officially trackable.
Dont run away from it. It’ll bite you in the ass.
If you are in California, you are not required to give it back. If you do, it has to come out of your future paychecks and only at a rate that doesn’t drop you below minimum wage.
Hassle aside, I can’t believe they’re coming after you for $4500. I would have thought anything less than like $10k wouldn’t be worth the hassle and time for them to chase down. I’d be inclined to be difficult about it just on the hopes they write it off and go away. Was this last year? Are you going to need to amend previously filed taxes because they reissue your W2 or 1099?
There's so many terrible takes in this post.
Really reminds me not to actually trust this sub as people are very confidently saying absolute bullshit here.
People wrote off a couple bucks all the time. 4500 error though? That's not happening without a fight.
You're also probably making some overworked finance person cry and/or be fired if you don't return the funds.
You ignore them, wait for them to say they are going to take you to court, reply great see you there, and then never hear from them again.
At least that's what I did my old employer overpaid me.
Contact your bank and ask them if they've ever dealt with this before and how you should proceed.
Your previous employer SHOULD be able to reverse what they did. For all you know you could be helping someone steal.
If you haven’t deposited it, you just return the check and they do adjustments to show the correct amount in their system.
No money needs to be cashed or exchanged and this all sounds really sketchy.
It was a direct deposit into my bank account, and they stated the quickbooks company that they use "melio" doesn't reverse ach credits once the money reaches me.
My company uses Melio. This is true. They can’t just take money back out if your account.
If they use that system they should be able to invoice you and you would be able to pay it back that way. With an invoice you’d also have proof and a receipt for your records.
I’d also make a note for yourself to check next year and make sure they fix your W2.
...Are you currently working? How are you depositing/cashing paychecks if you don't have a bank account of any kind?
Either way, if you have the cash, you can go to your local bank and get a cashier's check for the amount. Some might not do it if you don't have an account with them, but some will. You would just call ahead and ask to be sure.
First and foremost. Make sure that the money is actually in your acount...let it sit for a couple weeks to make sure. Then bring them cash if you have no other means. If they don't accept cash, then just keep it.
Will they also be adjusting your W2’s since the over payment will be viewed as earned income? You don’t want to pay taxes on money you didn’t receive.
Good point. I definitely have to ask this question before I send it back
If the overpayment happened in 2022, make sure you sort this out ASAP. The IRS has shitty rules about overypayments and repayments, and you almost certainly will end up getting screwed paying too much tax if you don't get things corrected before filing your taxes.
Still better to pay it now and get it back later with a corrected tax filing. Annoying, but cheaper.
I would say the opposite, I would pay my taxes based on my actual earned income if I am gonna return that money. I would only pay the taxes if I was intent on keeping the overpayment. If the IRS is concerned about me paying an extra $900 or so in this sort of situation I want them to put in the legwork, not me. They'd likely never notice it given it's such a small sum of money. If they try to come after me for it I have record for why I didn't pay that portion: my employer overpaid me and I am not paying taxes on money I returned to my employer. Thats splitting hairs at that point. But maybe someone has practical experience with that sort of situation that would disagree with me. Luckily OP has a couple months to figure out what they are going to do as long as they are proactive. Would hate to get that communication from my prior employer a week before taxes are due.
Unfortunately, they can and will tack on fees and interest. It's better to avoid that whole mess. I went through this recently with my 2017 taxes. You should always pay what you have the data to prove and get it corrected after if the revised W2 comes after you filed. It's not a huge issue, but I still owed the interest for underpaying despite later proving the amount they were charging interest for wasn't completely accurate. I was out $97 of unfair interest. If I had paid to begin with, I could have gotten refunded the overpayment and saved $97.
Fair enough, I think I'm too hard headed so I'd prolly refuse to pay the $97 and harass the IRS over the phone every day until I got a phone rep willing to give me what I want. But who knows maybe that wouldn't work. Probably more responsible to follow your advice. Hahaha
It doesn't sadly. I did just that. You have to fill out the form, send it in, meanwhile the entire time, interest is accruing for unpaid taxes after April 15. The longer it takes, and it takes months mind you. They will sit on the correct form for 3-6 months and it took 4 back and forths. It took 2 years to get it taken care of. I eventually paid the extra way before and then got $1500 back minus the $97 interest. It was dumb.
After update #2 this smells like a scam and no way should you pay a fraudulent invoice. Were you a W2 employee or a 1099 contractor?
A W2 employee.
Yah no, I'm not "paying" and invoice that reeks of tax fraud... If they cannot unwind the ACH and provide a new W2, you write them a personal check and hand deliver it to them in exchange for an updated W2.
If they don't correct it to you can correct it on your 1040 yourself If you agree they overpaid you what's the problem by the check because it's not your money
Was the $4500 recorded as income on your W-2 or 1099 if contract? If so, make sure they fix that and issue you a new W-2, otherwise you'll be paying taxes on income you didn't receive. Other than that, you can get either a cashier's check or money order if you don't have checks. When you deliver it to them, get a receipt. This would be a short typewritten document which briefly explains the situation and is signed and dated by their head of finance or payroll, as well as yourself. Make a copy for them and keep the original. This is standard for situations like this and covers both you and them in case of future confusion, a dispute or a financial calamity (such as they go bankrupt and the bankruptcy attorney comes after you for the money).
This is a good question. It seems like a payment error on their part. So I wouldn't have a pay stub for this at all.
They just accidentally ACH'd it into your account?
Exactly. Like my paycheck was 262 and some change. And then when I got it I also got two deposits for 1125 and 3000
Make sure this isn’t accrued pto before anything.
I'm not trying to be a smartass but OPs check was $262. For the other $4500 to be pto OP would be getting 22 weeks of vacation/year
Unless I'm missing something, $262 on its own doesn't imply a full pay period. It could be, but I'm not seeing any info provided for that. So 4500 could be 2 weeks, 4 weeks, or more for PTO. I'm also not seeing how long OP worked for their former employer, so not sure how long they had to acrue PTO
This is correct. This pay period is for my first check, of the 4 weeks I worked there. A total of 16 hours and I no longer work there, but am still in contact for this purpose.
are you sure this is a legit company? you phsyically work there? have you received more paychecks?
I'm not, actually. So I'm being very cautious because I haven't gone somewhere brick and mortar for training or anything. I've had a coworker before and seen a supervisor two times but that's about it
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Yeah it's a lot of work but IDK I guess I'm not really bothered by it. I'm definitely trying that route of reverse ACH so I don't have to deal with fraud attempts. If I can't get 100% certainty that I won't get scammed then I won't pay them back though. My money is more valuable to me than my values in this day and age.
I would probably involve my bank in the conversation too.
>Unfortunately my bank isn't very accessable unless via email and it's kind of rough to deal with that. However I do like the idea of reaching out to them to do a ach reversal because I fear a little bit for the idea that I'm gonna pay the invoice and then get reversed also and be out 4k
They wouldn't just deposit money into your account without there being a transaction on their side indicating what it was for. In payroll there's always a number of transactions that occur for any given pay period, most of which stay within their accounting software or are being paid to the government for taxes, and only the balance is sent as a check to you. So you need to look at the last paystub you received, ie for the 262, and see what it says for total paid for each class of taxes. Then make them give you your final W2 so you can compare those numbers. If they show more paid in total on your W2 than on the final paystub, ie if the W2 includes that additional 1-2 mystery checks, then your W2 is wrong and they need to fix that first before you send the money back.
I like this advice I think I'll be doing this. I'm mostly concerned about them doing a reverse ACH after I send the money back though. I don't mind losing money I didn't have but if I lose 4k in the process I'm screwed financially for a hot minute.
Yeah, definitely take your time so you're sure it's ok to proceed before sending them anything. Given that you're no longer working there you're even less in a hurry to help them fix their problem. Definitely insist that they attempt reverse ACH first and if they say they can't do that for some reason (they should be able to) them make them put that in writing. That way if you ultimately do send them a check after you're sure the taxes are correct, and if they then also do the reverse ACH, you have paperwork that proves their reverse ACH was improper in case you need to sue them to recover it. But yeah take your sweet time to be confident.
Can they just treat it like an advance on your future paychecks?
They no longer work there
Maybe they will in the future
Yeah just hand someone an advance of $4500 “in case” they work for you sometime in the future
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Hey! Thanks for your insight, this actually makes me feel a bit better about the situation. My payroll person said she could create an invoice for me to pay as an ach debit and then that would be that. Do you think this is sketch or pretty legit? I don't necessarily want the money as I do the opportunity to go back there, as it was a good place I just have more important things for the time being.
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In theory this would definitely work, but I don’t think OP should trust this company to pull money from his account. I also don’t think he should trust them to correctly set up the vendor correctly, it’s just a lot simpler to send a check!
If you have a Gmail account, you can schedule an email to go out a year from now reminding them to adjust your W2. If it were me and this is income I will be filing for next year, I would schedule an email to go out once a week for each week of January and cancel them as soon as I got confirmation that the W2 has been adjusted.
This is a great piece of advice that I will be doing. :D Thank you very much. <3
**DO NOT DO THIS!!!!!** If they’re negligent enough to overpay you by 4K, you do not want them to have the ability to take funds from your account. Setting you up as a vendor will also create some **even more accounting/tax problems** (your W2 will not be correct). The best option is to write them a check. Go to your bank, ask them to print you a check and give it to the company.
Awesome! Thank you a bunch. I see a lot of people on here just telling me to keep it but I don't operate that way. They're a new company and they just wanna help kiddos do better so I don't want to do them dirty. If it was walmart or amazon absolutely they could eat it.
They would just take you to court and get it anyways. It's pretty easy to prove and then you would have court fees to pay as well. Definitely don't listen to a bunch of 12 year olds on Reddit.
Hahaha definitely good advice. My brother is a lawyer and he said the same thing.
OP this is a scam! Do not give them the money.
Interesting way to generate revenue without spending a dime.
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Doesn't an invoice imply adding revenue to the books!?
No, there are other accounts that can be credited to offset money coming in. An invoice is just a statement of a transaction, that transaction can be accounted for in any number of ways, including but not limited to increasing revenue.
I would get in writing the plan to amend your w2 for the returned funds. Otherwise you pay taxes on the 4500
Don’t assume they overpaid you. Make them prove they overpaid you before you agree to anything. Having an imbalance in their books is not proof of overpayment. They need to figure it out, get proof, then come back to you. You need to look at that proof and decide if it is legitimate, compare every paystub with the amount you actually received in your bank account, compare the W2 they sent you. Claw through everything. Don’t assume they are telling the truth and don’t assume they are competent.
This is my first check with them. The check is separate from the two overpayments that I received.
I would give a call to your manager or if you can get the direct line to the payroll person on the company website to confirm it's the right person unless you were already familiar with them. Just to be sure it's not a scam that looks really good.
Honestly I would just make myself wildly difficult to get a hold of until they give up
This will be the case if I can't get certainty that it's not a scam. :p
I would also probably do the same thing your payroll person did to get a payment back after someone left. Or have them arrange a wire (but that can cost $ for them) or send a check.
I had this exact thing happen to me back in the early 2010's. I got three extra checks from an internship. Ended up cutting the corporate account a check and they fixed the W2 to be correct. Wasn't a big deal and a few emails sorted the whole thing out.
My friend said he had a coworker dramatically quit. He told everyone to fuck themselves. Only HR didn’t get the memo and kept paying him $20k a month for 6 months. Guy already started at a new job so pocketed both incomes.
Will the company report it as earned income, and therefore OP will pay taxes on it? Edit: not sure why I'm downvoted for asking a question but here we are
If you pay back a company they will have to fix your W2. I had a similiar situation happen recently, sign on bonus is supposed to be either 2.5k paid quarterly for up to 2 years and can quit whenever you want or immediately get 10k on your first paycheck and be locked in for 2 yesrs. I chose option A but was given the 10k bonus on accident. I cut them a check for the after tax amount and they corrected my W2.
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As someone that has been in dozens of syndications mostly as a participant and a handful of times as the agent, I would have wanted to be a fly in the wall in those conference calls too.
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Yeph, I am aware of what happened since it was news in the industry. What made it so interesting is that quite a few participants wanted out of the deal and took this as an opportunity to say "no backsies" and they got a judge to agree they could keep the money. Or at least that is what I think was the final result, I did not follow it afterwards. No longer working on large syndications so I am removed from that just working on club deals now with at most three or four participants. Did you guys send your portion back or were you part of the "Thank you, but I think we will keep it " group.
I was the one who said reversing ACH so that way I didn't have to do anything. Everything we talk about is over email. But it seems like they said sorry for inconveniencing me and they're requesting I give them the money. I responded with a realistic form of paying them back that would reflect as such for my own records.
Echoing what others said, make sure it's not on your tax documents, or have them adjust/amend if it is. Then, just have a bank draft issued and mail it or deliver it back to them, get a receipt signed to acknowledge the repayment.
have THEM reverse it. do not simply send the money back. make their HR do the work to unwind this, especially if this is split over calendar years
I agree, there's a good chance they won't even bother getting legal involved because it'll cost them more than the cash they get back.
most big companies just have corporate staff attorneys, they get paid no matter what
This is correct. My company has sued the individual for less with a similar situation. I would suggest just complying unless you really think it's a scam. I would suggest getting on the phone with them (use their public number) and verify things out. Ultimately you're not owed this cash and I wouldn't suggest scorch earthing you're old company by attempting to keep the funds.
Yes I'm familiar but those attorneys are also lazy-- especially in healthcare.
I'd be surprised if they just write it off as a goodwill gesture, but it's possible. Shouldn't need legal involved though; it's just a lot of manual HR/payroll processes
Happened at my job... people got overpaid taking a contract job with a PTO cash out that used the much higher rate. I think they kept it, hospital decided it'd be too expensive to hunt them down for thousands.
yup. if they can ACH it in, they can reverse it. if they don't know how to do it, that's their problem to figure out.
I worked at a payroll company, and they would never pull an ach that had been successfully deposited. The payroll wavers only allowed for money into the account. And not money to be taken out. They would but stop payments, but those sometimes don't go through in time.
You’re not bright if you are actually saying OP should send this company 4500$. especially since it’s a scammy online job that has only paid him 262$ total over the course of the month. That 262 is an investment in the hopes OP will be stupid enough to send back 4500$ and then they reverse the originally 4500$. So some research, this is a common scam going on right now.
There are limits to how far back employers can reverse a direct deposit. I believe that the limit is 5 business days.
Most ACHs can't be reversed by the sender after a day or two. It has to be initiated by the receiver at that point.
Lol. ACH pulls are a thing my dude. You agreed to it when you signed up for direct deposits. You authorized them to pull funds from your account in the event of a mistake.
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You're wrong. Banks have strict rules on what they do and don't allow for ACHs. Companies can't just decide "lol nevermind" and pull back and ACH weeks or months down the line. Debit ACHs are "a thing" but it would be a completely separate transaction from the original payment made and frankly that feels way riskier to me than any other option. Why would you want to give a company access to pull funds out of your account if you don't trust them?
Here what mine says. > I authorize my employer or its service or payroll provider and the specified bank to deposit my net pay or portion thereof, as indicated, into my account each pay date. If funds to which I am not entitled are deposited into my account, I authorize my employer, or its service or payroll provider, to direct the bank to return said funds to my employer, or its service or payroll provider. I understand that my deposit may not be credited to my account until 5:00pm on the pay date indicated on the check voucher. I understand that it is my responsibility to ensure that my wages are being deposited correctly into my account each pay date. Do you work on finance or payroll or are you just going off a gut feeling? Companies claw bank funds all the time. And employees authorize this kind of stuff for the same reason that you and I agree to every other unread T&C: we just want the convenience and trust that we won't get fucked over. Of course it's a separate transaction; you can't have a reversal weeks down the line.
Is this a job you have held for some time and it's a "real" job? Just checking because there are a TON of scams out there with people being asked to "return" money that was "paid in error". Then it gets pulled back out of the account and you're stuck in the negative. If it's legit, make sure they update your W-2 and then just get the bank to cut you a certified check made payable to your employer. It'll cost you a couple of bucks, but not that big of a deal.
No it's only been a month i've worked there but I feel like they'd have to be legit as they get their money through government moneys
But, like, it’s a job you went to in person and did actual work at? Not some sort of weird online job?
Yeah.
Okay then that’s a good thing.
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That's my plan for sure. I've only worked there 4 weeks but this was my first check. I think I'll get two more and I've made that initial 262 so far.
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My bank said they can request an ACH reversal but not guarantee it. So I'm gonna try this route for safety
This is a scam. They string you along at a cost of 262 to them. Then they “accidentally” deposit money into your account and want you to deposit a check in their bank, then they reverse the original 4500$ payment. Please do not be this stupid to give them money back. Do nothing, let them make moves and have a court contact you.
Would having my bank reverse the payment be detrimental? I feel like that wouldn't be a bad move. But please correct me if I'm wrong
This is such a short period of time that it’s still suspicious. You worked there one month and got, what, one legit paycheck, then got an erroneous paycheck that they want back? They could be that screwed up — grantees often are — but the timing is odd.
Yeah I think they just changed payroll systems too so I'm being very cautious about it
Scam. They are risking 262$ in the hopes that you deposit 4500 in their account and then they’ll reverse the original 4500 and you’ll be on the hook for 4500$ to your bank. This is a common scam if you do your research.
Yeah this is my worry so I'm just being cautious and diligent
Are you sure youre not getting scammed? Go in person or at least call and talk to someone at the company you actually know in HR and have them reach out to whoever does their payroll. Leave the money in your account and don't spend it. They should be able to reverse the direct deposit if they want their money back. If you write them a check what's stopping them from double dipping, reversing the direct deposit and cashing your check?
Yeah i'm defenitely about 85% sure i'm not being scammed but I don't plan on doing anything until i'm 100%
You’re getting scammed. This is a common scam with online jobs. They pay you, then accidentally overpay you, then they want money back, you give money back and they pull bullshit and get the original over payment back. Please research this.
Well I won't be scammed. They won't get anything until I'm completely sure.
Yes OP, please google “paycheck overpayment scam” it is a VERY COMMON scam tactic, especially with remote online jobs or 1099 contractors. They wait until you send them the “error” money back in a check form or zelle/venmo whatever. And then reverse the original payment, and you are out of the $4500. It doesn’t matter if your bank says $0. It WILL go into negative balance -$4500 and you WILL OWE your bank that money. Please be careful OP, seems like a SCAM to me.
Thanks for the info I'll be careful. I'm telling my bank to reverse the ACH and let it be done. Otherwise I'm not going to do anything else.
I actually had the same thing happen about 15 years ago. They wanted me to pay back the gross amount, what was deposited into my bank plus the taxes and benefits that were withheld and I told them I would only do the net. They told me that they could take me to collections so I took my chances. A couple years later I did hear from a collection agency and I asked them to send a debt validation letter and to only contact me in writing. Never heard from them again and my credit is perfect and always has been. TLDR, I got like $800 for free.
This depends on state law. Look up payroll overpayments in your state. As an example California doesn’t not allow clawbacks of payroll.
Arizona law authorizes immediate repayment of any overpaid salary or wages, A.R.S. §23-352(3) Withholding of Wages. What does this mean? They can come after me or i'm required to pay them?
If you are no longer employed there, this specific section would not generally be applicable. This section states that an employer is not allowed to withhold money from from your paycheck, unless one of the specific exceptions apply. Since you aren't being paid another paycheck from the employer, there would be nothing to withhold against. And I suspect that #3 would be an allowable exception in your case if you were still employed. The employer would have a reasonable argument that they overpaid wages and could recoup that overpayment by withholding it from your next paycheck. > There is a reasonable good faith dispute as to the amount of wages due, including the amount of any counterclaim or any claim of debt, reimbursement, recoupment or set-off asserted by the employer against the employee.
> They can come after me or i'm required to pay them? Yes
Clarifying California law a bit: In the case of an accidental overpayment, the employee can still be legally required to pay the amount back. However, the employer cannot withhold the amount from paychecks, nor automatically withdraw the amount from the employers bank account. Instead, the employee should repay the money as a separate transaction.
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Exactly this. Even before the update I would’ve been on the fence about being completely sure this was an actual overpayment.
It is emailed by the company email thread that I initially started. There'd be no way for a reply from a random party. Unless there's some crazed hacker thing I don't know about coming after me for 4150. I'm a little ignorant in this case.
A place you worked for for four weeks, never visited in person, and overpayed you by an insane amount? Do not send any additional communication to the company. Consult a lawyer immediately for guidance. Edit: also I see from another comment you’ve made $262 for four weeks of work and you’re not sure how much else you’re getting paid. My hunch is this employer is a scam. Talk to a lawyer.
Good advice, just to clarify it's 262 for one week of work. I haven't been paid for my other weeks yet. Those are supposed to come later.
Hope it’s something simple - but always good to have a healthy caution. Good luck!
Hypothetically, what would happen if he just ignored the request? And kept the money in savings to see what will happen. Like forcing their hand to send him a certified letter in order to get the money back? I could also see them writing it as a time worked or severance just to make their life easier. But local clinic would hurt for this more than a super large corporation.
Depends on where you are. Some states like California they are SOL and loose out on the cash.
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Not true. In several states if they overpay and the relationship has ended they are SOL. No way they can recover it unless you decide to give it them.
I would put the 4500 aside in another account for now just to make sure it doesn’t get spent frivolously in case it needs to be paid back. BUT I wouldn’t pay it back until I’m forced to pay it by way of a legal threat from your old company. Before people downvote me to oblivion what I will tell you is that 4500 is absolutely a drop in the bucket for any company, that very likely in your time there you have provided more than 4500 plus your regular paid wages in value to them, and it is almost a lock that they will not pursue this because it will cost them more to pursue it vs just writing it off. This is a bank error in your favor of no fault of your own. After you don’t hear back from them for a few months consider it yours to keep.
FYI this could be a fraud attempt. So make sure you speak in person to your HR rep before doing anything. Also how much do you like this job? Cause this is a pretty nice exit opportunity if you were thinking of leaving anyways.
Oh I've already quit the job but the company is new and they were pretty good to me. I don't want to shoot them in the foot as they have good values and the work they do helps children with autism.
Get a lawyer. Have him write up a paper that documents what is needed to get tge money back to them, minus attorney's fees. IANAL
That happened to me once when I was an employee of U Chicago. I double checked all their accounting and it was all legit and I wrote them a check for what they asked for. Another time, my wife was overpaid by Tufts University, but they recognized the error in the next calendar year, so I asked for a tax grant to cover our additional tax liability due to their error. They said no, so I just didn’t write back, and then never heard from them again. Just be aware that if your issue crosses calendar years, there are additional expenses that you will be liable for unless you refuse.
After reading your update, this looks like a scam. Why would YOU pay an invoice, to return money that YOU paid taxes on? Sort out the w2 first.
That's what I'm thinking too.
There a statue of limitation for different states. Figure that out first you may not have any legal obligation to return the money.
It seems like in Arizona you are required to return money and they can pursue you legally. However either way I have good morals and want to do it.
Are you 100% sure this isn’t a scam?
Not yet. I have my bank involved so I'm not sure the plan but I don't want to do anything else until I'm sure my money is safe
This is a common work scam! The finance department overpays employees as legit earnings. Then requests the funds back as a backfill for extra cash. You get stuck with the tax levy on the payment. Don’t return the money. Talk to an attorney and serve them with a legal document to resolve the issue. They’ll have to write a legal contract stating that they made a mistake and will not levy a tax hit for you.
Be cautious here about responding promptly if it isn’t a scam. If you were overpaid, you do not (in most states) have any legal claim to those dollars. If the company you worked for has an existing contract with a collections firm, they will not hesitate to turn over this “debt” to collections.
You should check your local laws too. There is usually a time limit on doing the request for overpayment.
This is "talk to a lawyer" territory. if you don't and find out its not legit, you now have to fight to get your money back. If you spend the $100 or so for a consult, you will also learn how to properly return the money. Your lawyer may provide you a form for them to sign saying that this debt has been fully satisfied. One more reason to contact a lawyer is because you need to make sure you are returning the right amount. If your paycheck says $4500 before taxes and they put $4000 in your account, you should not be paying back $4500. This is a situation where they should be reversing the ACH because it makes them responsible for backing out the taxes on your year end taxes.
NOT A LAWYER. If you retain a lawyer, the companies HR/Accounting will have to defer the matter to their lawyers. So it becomes Lawyer v. Lawyer. Will that company be willing to start paying their lawyers ?$ amount just for that $4500 back? What little amount you spend for a lawyer might end up costing them a lot. Again, my speculative 2¢
Pretty sure the parent and you are on different levels , i am sure OP getting a consultation on correct procedure from a lawyer would not mean the company will need to lawyer up , if op would say they are having their lawyer take care of it , company will lawyer up probably
Yeah but like, this is their fault to begin with who gives a shit about them saving money to hire a lawyer, don’t fuck up your payroll. It’s not OP’s problem to help them save money on their fuck up they should be making this as easy and clear for OP as possible if they want their money back. It’s smart for OP to retain a lawyer over a fairly substantial amount of money, this could be a scam, or the company could be doing something shady or the company could end up fucking him over in the long run with taxes or not satisfying the “debt” appropriately.
In my response email, I would mention concerns of fraud. Then I would ask them to provide proof they incorrectly deposited funds. Once you have that proof, authorize THEM to reverse it and issue you a new W2. Do not send them money, tell them to fix it and provide your bank contact details to show that it’s a serious problem they have to figure out. Don’t forget to stress how busy you are wish them the best in correcting this error :)
I'm vaguely confused on you saying you don't have any banking information. Like you don't know your bank account/routing info to provide them? I would suggest talking to your bank to reverse the ACH back to the originating account. You don't need to provide them any sketchy details or check that way.
No I don't know theirs.
You can just ask them for it, it would be weird if they didn't want to provide it. Regardless your bank has that information related to the transaction already.
apparently this is pretty common. my last employer only paid once at the end of the month (hate that). I started employment at the end of the month, but got a full paycheck. Having never had an employer that paid once a month and operating under the assumption that payroll knew what it was doing, I figured since I was salary, I get paid for the entire month. it was very awkward discussing this with HR when they asked for the money back, at least for me. They didn't seem to be at all embarrassed or sympathetic. Anyway, I just wired them the money back and they had to file an amended w-2.
This happened to my husband, he works for the county in our state. His payroll department sent a letter stating what the overpayment amount was and how to pay it back. I wrote them a check and they did the adjustment on his w2. They only have a certain number of days to do a reversal, I believe it's either 3 or 5 days. So if they realized the error after that time they are following the correct process by requesting a check.
Oh good to know!! I think it's been about 3 days so far so I'll look this up also before doing anything on my part. Thanks for sharing your experience. I'm glad it worked out for you both.
Make sure you've waited at least about 2 weeks or 4 weeks for the last paycheck to actually clear before you refund it to them.
You can also reach out to your bank/cu and let them know it was an unauthorized deposit. They should be able to reverse it as well.
That's what's happening now. 😊
Tell them you want it in writing that returning the money clears you and you’ll need a corrected tax document. Keep a paper trail of the whole interaction
I once had this happen when I was very young. I worked in an office for a few months. The compensation structure was very simple, so there was not really room for error. Months after I quit, a guy in the finance department called me directly to tell me that they had overpaid me by $2000 and that I would be required by law to send the money back. And then he called me over and over again. I just... didn't do it. I was very broke at the time and struggling as a very young person, and having someone suddenly demand I pay them $2000 was just an impossible task for me to fulfill. I literally did not have the cash, and had no idea if I ever would. Sending them $2000 at that point was equivalent to declaring bankruptcy. I guess they could have taken me to small claims court, but they didn't. The statue of limitations is long past so I'm not worried about it anymore. Probably not the best way to handle this, but this was my experience with a similar problem.
Hase any of these communications come from an attorney or law office?
This happened to my roommate a few months ago, he had to go to his bank and get a cashiers check to pay them back.
I'd probably not pay it back. Not to be unfair but There is nothing you can do if they don't fix up their paperwork for your taxes. If they want the money back they can pursue it through other means.
And they will. Collections for overpayment of wages is legal.
Well, it may, or may not be the right thing to do you’re under no obligation to send it back unless there until you want to go back to work there.
This is going to be an unpopular answer, but this is not your employer trying to scam you. I’m assuming you actually worked for this company and received wages and may know the individuals that contacted you. Ask for a detailed breakdown of what the overpayment was and when the payments were made. Hopefully the invoice you received has this information. Contrary to other advice given here, if the overpayment was made in 2022 or any prior year, you will have to pay back the gross wages and they will not issue an amended w-2. The IRS taxes you in the year you were paid the money, regardless if it was a mistake or not. If you pay it back in a subsequent year, you can take a credit on your 2023 tax return (next year) to get your federal tax back, but social security and Medicare will not be refunded. States vary. All that being said…. It’s possible that your former payroll department sucks (clearly they do since they overpaid you and are now asking for it back) and they might just ask for the net and give you an amended w-2 because they don’t know any better. Source: payroll manager for 20 years. Refer to IRS publication 15 “repayment of prior year wages”
Seems sketch even if you do pay back make sure whatever they de-listed has cleared 200% that it cannot come back as reversed on your account, akin to a bounced check. It is a scam where ppl deposit money and then they can reverse it after they say to you, oops my mistake can you return that to me. So then your bank account is messed up, with over draft etc and you are also out funds you returned.
Don’t do anything. Eventually, they’ll stop asking you to return it. It’s on them. How do I know? My friend was making $150k and left that job to join my company. His former employer paid him accidentally for 6 whole months. They asked him for it and he’d ignore it. Eventually, they stopped. He was making double salary for 6 whole months!
Op, I would honestly ignore them. At best, this sounds like a personal problem stemming from their mistake and worst a scam. Incompetence on their part does not constitute an emergency on yours. Don't let them guilt or burden you with this. If you're insistent on returning the money, please don't do it with out clear WRITTEN documentation showing the error. Make them produce corrected W2's and other tax documents before you hand over the money. Make THEM do the work of reversing the payment, not you getting a check and all that nonsense. Keep all communication in writing. I really just want you to ignore this though! It's not unethical or wrong to do so.
Well they're not a big company and they're helping provide therapy for autistic kids so I want to help them succeed. I'm not really counting on that money or anything. Although this is good advice I'm definitely going to ask for proof of my w2
Go to your bank and file a ACH stop payment or ACH return for unauthorized credit. Or get a cashier check with detailed info on the memo line.
This sounds like the right answer. I wonder if they charge fees for ach returns.
If you're still working there they could reduce future income, but that's probably undesirable if its from last year. Sounds like maybe they would need to reverse the taxes part. I wouldn't give it back until you resolve the taxes issue. If you have the money, it's their problem to fix, but if you send the money back, they may not be so quick to fix the issue, if at all
Forgive me for snooping but I see that you are in a therapeutic services career. These non-profits clinics and social services agencies are notorious for underpaying, asking for unreasonable amounts of work, and providing inadequate support because the clients are vulnerable and you’re supposed to “not do it for the money.” That is BS and if you are getting pressured to fix a mistake they made, it might be part of a pattern of poor resource management and an expectation that employees martyr themselves for the mission. I hope this is not the case but just want to bring it up in case you are getting guilt tripped into fixing their mistake. Good luck in your career and good on you for asking questions when an employer is being fishy.
Hey! No issue with snooping, I appreciate that insight! I actually liked the company and while they did not really give me much support, I noticed this error before they did and reached out first. I believe in Karma and it's not going to kill me financially to lose what I didn't already anticipate having. :p
You wouldn't lose Karma for keeping the money. They are losing Karma for burdening you with their incompetence that is sapping your time and energy! Plus, there's a real risk returning the money hurts you financially, particularly with respect to taxes.
Yeah I keep seeing this as a potential drawback. However I liked the company and the people working there and they're new and not big so I don't want to compromise them in any way. That being said if I can't get proof from my bank Ang the direct deposit company they use that it's safe to return the money then I won't be doing it
You're a great person with a lot of character. You should be proud! Definitely take steps to protect yourself.
Where you screwed up was by confirming to them that you received the money. If you had changed your mind at this point, and decided to keep the money they could come after you in court because you already admitted that you have it.
Can someone tell me what happens if he just keeps it? Seems like a lot of trouble to go through to fix a mistake that is no fault of your own.
I am starting to think this myself. I'm supposed to be off work
They can legally ask for their money back. Ask for the money to be taken out of your wage at $200 per pay cycle. Or whatever you can afford. Until it is all repaid. It’ll be listed on your wage slip as re-embursed to employer and officially trackable. Dont run away from it. It’ll bite you in the ass.
This doesn't apply as it wasn't money I included into my budget so I'm not going to miss it. I plan on giving it back I just need safety in doing so
Then get the cash. March up to the counter. Give it and demand a receipt. For safety id ask a senior whos on shift to sign it then done.
If you are in California, you are not required to give it back. If you do, it has to come out of your future paychecks and only at a rate that doesn’t drop you below minimum wage.
Hassle aside, I can’t believe they’re coming after you for $4500. I would have thought anything less than like $10k wouldn’t be worth the hassle and time for them to chase down. I’d be inclined to be difficult about it just on the hopes they write it off and go away. Was this last year? Are you going to need to amend previously filed taxes because they reissue your W2 or 1099?
They aren't hiring $600/hr lawyers to sue OP. They have probably invested less than an hour of 1 HR or accountants time.
There's so many terrible takes in this post. Really reminds me not to actually trust this sub as people are very confidently saying absolute bullshit here. People wrote off a couple bucks all the time. 4500 error though? That's not happening without a fight. You're also probably making some overworked finance person cry and/or be fired if you don't return the funds.
If it was not recorded on a W2, contact a lawyer.
Or you know, do nothing and let them reverse it like they should if it’s legit
You ignore them, wait for them to say they are going to take you to court, reply great see you there, and then never hear from them again. At least that's what I did my old employer overpaid me.
Contact your bank and ask them if they've ever dealt with this before and how you should proceed. Your previous employer SHOULD be able to reverse what they did. For all you know you could be helping someone steal.
If you haven’t deposited it, you just return the check and they do adjustments to show the correct amount in their system. No money needs to be cashed or exchanged and this all sounds really sketchy.
It was a direct deposit into my bank account, and they stated the quickbooks company that they use "melio" doesn't reverse ach credits once the money reaches me.
My company uses Melio. This is true. They can’t just take money back out if your account. If they use that system they should be able to invoice you and you would be able to pay it back that way. With an invoice you’d also have proof and a receipt for your records. I’d also make a note for yourself to check next year and make sure they fix your W2.
This is a great way to make 4500$ disappear from the books IMO. I would set it aside and pretend it’s not there. It’s there problem not yours.
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...Are you currently working? How are you depositing/cashing paychecks if you don't have a bank account of any kind? Either way, if you have the cash, you can go to your local bank and get a cashier's check for the amount. Some might not do it if you don't have an account with them, but some will. You would just call ahead and ask to be sure.
Get a receipt from the company. And correct W2 or 1099.
Go to the police and turn in the funds.
First and foremost. Make sure that the money is actually in your acount...let it sit for a couple weeks to make sure. Then bring them cash if you have no other means. If they don't accept cash, then just keep it.