Salary Overpayment Dilemma: Can Employers Legally Recover Excess Pay After an Error?

Hi,

If, for example, the company, due to some misunderstanding, wrongly calculates the last working day (the regional office failed to communicate to the head office) and the head office has credited 3 months' salary to the account of the employee, can the company now recover the excess salary paid? Is there a legal action to take if the employer is not ready to pay back?

Dear Naveen,

The most feasible solution is for you to talk to the employee and request him to return the excess money. It is difficult to recover money in court but not impossible. It's the organization's mistake, and if you go to court, the organization has much to lose (time, money, and goodwill) than the employee. Make a policy to ensure that this sort of mistake does not happen again.

Nearly impossible as it happens only due to negligence and carelessness, or worst, willful retribution-led recovery which will get quashed anyway.

No recovery from salary if negligence of authorities: CAT