Overpayment of wages

Q: I have a member who, unknown to them, was overpaid wages. The next month their employer took back the whole amount that was overpaid leaving them with £50. The employer is saying that they are entitled to do this as it is an overpayment. Is the employer legally allowed to do this?

Usually when an employer deducts money from a worker’s pay packet without authorisation or prior agreement, the worker can go to the tribunal and claim the money back as an unauthorised deduction from wages under part II of the Employment Rights Act 1996.

Unfortunately, such a claim cannot be made where the employer’s deduction is to recover an overpayment of wages. If the member disagrees that they were overpaid by the amount deducted, they would be able to ask the tribunal to decide how much if anything was owed back to the employer. They would then have to go to the civil courts to reclaim that sum of money.

The member’s best bet may be to try to negotiate a staged repayment.