Labour Research August 2004

Law Queries

Overpayment of wages

One of my members, who is a driver, was overpaid last week. He accepts that he is not entitled to keep the money but wants to pay it back a bit at a time. Can our employer deduct the whole overpayment in next week's wages?

An employer is entitled to recover an overpayment of wages without the employee's consent in these circumstances.

Under section 13 of the Employment Rights Act 1996, an employer cannot make a deduction from wages unless it has the express agreement of the worker, or to fulfil some statutory obligation. However, this does not apply to overpayment of wages or expenses, which are specifically excluded by section 14 of the Act. As your member accepts that this was an overpayment and not much time has elapsed, your employer is entitled to recover the money in one go.

There are special provisions relating to retail workers when payments are deducted because of cash shortages or stock deficiencies, but these do not apply in your case.