How to Handle an Employee Refusing to Return an Accidental Salary Overpayment?

Dear Seniors, One of the employees deployed at a client site in Bangalore has a monthly salary of Rs. 8000/- PM. During the process of online transactions, Rs. 10000/- (One Lac) was inadvertently transferred to the employee, and he withdrew the entire amount instantly from his bank account. Now, this oversight transaction has come to the attention of management, and they have approached the employee for a refund. However, the employee refuses to refund the amount, claiming that the transferred amount is his own, even though bank transaction details have been provided to him. Please suggest what action needs to be taken to recover the amount and whether he might leave or escape the job. Regards, Prakash Tiwari

Dear Prakash,

Sometimes mistakes of this kind do happen; however, how it escaped the attention of the Accounts team is a matter of surprise.

Secondly, there is a discrepancy in the amounts written in figures and words. If Rs 1,00,000/- was transferred, then your total salary bill must have increased by Rs 92,000/- for that month. How was this oversight not noticed by anyone?

Thirdly, it would be understandable if Rs 80,000/- were transferred instead of Rs 8,000/-, but how did Rs 10,000/- or Rs 1,00,000/- get transferred?

Lastly, if the employee has refused to refund the excess amount, then immediately approach the police. You need to prove that the person involved was your employee and provide evidence of the bank transaction. Before filing an FIR, ask the police authorities to give him one last chance to comply. Perhaps, when summoned to the police station, he may change his mind. If he remains stubborn, proceed with the FIR.

How long has the employee been working with the company? What has been his overall conduct? His refusal to refund the excess payment reflects on his integrity. Regardless of whether the matter is settled amicably, you must terminate this employee.

Thanks,

Dinesh V Divekar

Please call the employee in question and request an immediate refund of the balance amount (credited amount minus his salary) to the company. Kindly issue a memo to him, enclosing a photocopy of the company's transaction advice to the bank. Additionally, inform him that if he refuses to refund the money, the company will proceed to recover it with the assistance of the police.

If he continues to evade the issue or delay, legal action will be taken.

Thank you.

Best regards

Dear Seniors,

Thank you for your valuable suggestions. Apologies for the oversight in writing ₹10,000/- instead of ₹100,000/-. The actual amount that needs to be transferred is with the ex-employees, but it was mistakenly transferred to the incorrect employee. We acknowledge that this is a major error on our part.

Regards,
Prakash Tiwari

First of all, a notice may be issued to the employee to refund the company money paid to him. If he does not agree to refund, then you may proceed to lodge an FIR as this action has been committed in the course of employment. The FIR will be lodged in the city where this incident occurred.

Regards,
rdsharma

First of all, it is your fault. Hence, you should give a letter to your employee stating the amount he is actually eligible for transfer and the excess amount transferred by mistake. Ask him to refund the excess amount within a specified time frame. If he returns the amount, that is acceptable. Otherwise, you should consider filing a police report on this matter and take disciplinary action to terminate his employment.

If this is a salary account, then you can inform the bank to put a hold on the future amount that can be withdrawn by him, so that any amount credited in the future will be frozen. The best option, as suggested by many, is to speak to him and ask him to refund; if not, action through the police is warranted.

Best Regards,
Dolphy Goveas