View Full Version : Salary Overpayment.. Can They Do This??
Speedy Claire
09-09-10, 07:21 PM
Just wondering if anyone can provide any advice on the following query.
Myself and I think every single District Nurse working for my PCT today received a letter - a notification of salary overpayment. The PCT has recently changed payroll provider and it has "come to light" that there has been an error in our working time directive payments (unsociable hours). They say there was no way that us nurses would have realised we had been overpaid and they say the error was simply due to somebody pressing the wrong button.
The error has resulted in overpayments for the period 1st Sept 2006 to 28th Feb 2010 and they say that they intend recovering this money over a 36 month period commencing October 2010. In some cases the overpayment is as much as £2,000 and I`m just wondering if...
Legally they can just take this amount out of our salaries each month?
If this error is down to an oversight by the payroll provider should we actually be responsible for the full amount? should there not be some sort of discount.
Are they actually able to recover monies overpaid from 4 years ago?
Sadly, probably yes - I think it's because the terms of your employment contract will define payment rates etc.
Assuming you're signed up, speak to a union rep - they should have access to a professional advisor. If you do repay, don't forget that there could be some tax back due as a result, but you'll probably have to claim it yourself for previous tax years. Again, union should be able to advise.
Perhaps collectively you could campaign for an ex-gratia payment in return for being helpful. Anything to soften the impact.
andrewsmith
09-09-10, 07:29 PM
They are able to do it if they realise within a month and can correct it. After this amount of time the payroll provider is at fault.
Reclaiming from that far back is stupid.
Has the union been notified of this letter yet?
The WTD payments in the NHS are fraught with difficulties, and different trusts apply the rules in subtly different ways. The new provider will have been looking at the approach as part of the migration which will have turned up the error. (when did your trust migrate to ESR?)
Can they do it. Short answer is probably, and the long answer is maybe. Averaged over the 4 years, they are fairly small amounts, and only some of the staff affected will have recovery (what are they doing about staff turnover). It is almost certainly not an illegal stoppage, but I'm surprised the Trust is making the effort.
Claire is there anything in your contract of employment about recovery of over payment.
The following is from CAB's website.... may be worth a call to them tomorrow
By law, your employer is only entitled to make certain deductions from your pay. They can deduct tax and national insurance (NI) and they can also make other deductions for which they have previously got your written consent or which are allowed in your contract of employment.
However, if there has been a genuine overpayment of your wages, your employer doesn't need your consent to recover this. They can make a deduction from your wages without your agreement. There are some exceptions to this rule and there are special rules about deductions made from shop-worker's pay.
I will have a word with my boss tomorrow and see what her take of it is.
A couple of years back my employer paid us all twice in one month. were paid by BACS system and as they moved from one bank to another the old one wasnt cancelled, hence the 2 payments.
Were were asked to pay it back via a cheque, we were told if we didnt then it would be claimed back off next months pay.
Seemed easier just to write a cheque and be done with it, some took longer than others, but at the time we couldnt be sure they were in the wrong, as much as we all wanted double pay that month.
In theory they can take it one go but in practice most employers would look to recoup the over payment(full amount) over a reasonable time frame.
I'd ask for detail of the over payment, i.e. the calculation.
It might be worth asking someone versed in employment law whether or not the overpayment over such a long period would constitute a change in contract. Wouldn't hold you breath though.
They are able to do it if they realise within a month and can correct it. After this amount of time the payroll provider is at fault.
No, No, No. Employees actually have a legal duty to check their payslips and raise any unexpected payments or deductions. Time can be an issue, but you don't get to keep it after 'a month'
maviczap
09-09-10, 07:34 PM
One of my team was overpaid by about £2000, but he claimed it would have cause unecessary hardship to pay it back, so they wrote it off.
When I was overpaid by £1500 I was threatend with disciplinary action if I didn't repay it, which was correct according our guidance, as I should have notified HR about the overpayment :(
Speedy Claire
09-09-10, 07:43 PM
@ Ruffy..... we weren`t informed of this until 5pm tonight when the letters were given out. Collectively we`re in 2 unions, either the RCN or Unison, we`ll contact the relevant people tomorrow. One of my queries is, as you say, we have paid tax and N.I. on this overpayment so where do we stand with this.
@ Simesb.. I`m not 100% sure about the ESR, would have to find out and I hadn`t thought about staff turnover, thats one other thing i`ll put to them. It is relatively small amounts spread over 4 years but in my clinic alone there are 30 District Nurses and there are around 30 clinics within the PCT so that adds up to a nice sum for them to recover. We also have evening staff and night staff who due to the hours could potentially end up paying one hell of a lot of money back... as bad as it is for us on days my heart really goes out to the night staff.
@ Lily.... I can`t see anything at all in the contract about overpayment. I`ll see what the union say tomor and if needs be we can speak to someone at the CAB.
Many thanks for your help guys... a couple of pointers there for me to add to the email we`ll be sending collectively.
we have paid tax and N.I. on this overpayment so where do we stand with this.
Devil and deep blue sea. You will pay less tax this year as they recover the gross overpayment, so you may be better or worse off depending how you have progressed through your band, changes to tax codes and working hours.
Speedy Claire
09-09-10, 07:47 PM
Brian they`ve attached a summary of the overpayment to our letters. If I had a scanner i`d scan it and show you cos if anyone can make sense of it I`d be amazed. It`s literally just one line of columns with figures in... thats it!
Speedy Claire
09-09-10, 07:58 PM
Devil and deep blue sea. You will pay less tax this year as they recover the gross overpayment, so you may be better or worse off depending how you have progressed through your band, changes to tax codes and working hours.
I don`t really know where to start Simon... I would imagine that the Tax Office don`t know anything about this overpayment so I imagine it`ll be down to the individual nurses to notify them and get them to look into it?
I don`t really know where to start Simon... I would imagine that the Tax Office don`t know anything about this overpayment so I imagine it`ll be down to the individual nurses to notify them and get them to look into it?
HMRC don't know squat full stop. With so many staff affected, I'd expect your payroll manager to contact them on behalf of the trust. I'd doubt if HMRC want to know too much about it at the moment anyway...
We have paid tax and N.I. on this overpayment so where do we stand with this.
You deserve it back, with statutory interest!;)
Devil and deep blue sea. You will pay less tax this year as they recover the gross overpayment, so you may be better or worse off depending how you have progressed through your band, changes to tax codes and working hours.
PAYE may take care of most of it, but possibly not for previous tax years, especially if the repayment is taken from net pay rather than gross taxable.
Depends how accurate you want to be, but bear in mind the tax man could hunt you further in the event of an error (for up to the following 7 years IIRC). As it's their mistake, perhaps the trust should pay for a tax specialist accountant to review the calculations on your behalf, especially as they have already admitted you would not have realised the error yourself. After all why should you trust this calculation any more than the previous one they made? (A couple of hours each of that sort of support should wipe out most of their expected savings!!!)
You will be due to repay the overpayments but it is a civil matter, they can't deduct any monies from from your salary without your permission, there is a law against that.
PAYE may take care of most of it, but possibly not for previous tax years, especially if the repayment is taken from net pay rather than gross taxable.
It'll not be 'correct' without getting HMRC involved. There are also state pension implications.
You will be due to repay the overpayments but it is a civil matter, they can't deduct any monies from from your salary without your permission, there is a law against that.
There is a law against illegal stoppages, and this isn't one.
Speedy Claire
09-09-10, 08:20 PM
Is a minefield.... I`m hoping the union will be able to advise us on the tax side of things but again, I`ve got a really impressive list of questions to put to the PCT including them employing a tax specialist accountant!
For me personally this is the second mistake the PCT have made with my pay this year. Several months ago they took nearly £500 out of my monthly salary in one go to cover another overpayment. Apparantly they had me recorded as being off sick for several years?????? They say they had been overpaying me by £15 to £20 a month but there was no mention of sickness benefits on my payslips that covered this period and I wouldn`t have noticed such a small monthly overpayment as my pay varies each month anyway
It'll not be 'correct' without getting HMRC involved. There are also state pension implications.
There is a law against illegal stoppages, and this isn't one.
Only if it is written into the contract that they can take back overpayments, has this been established?
Speedy Claire
09-09-10, 08:31 PM
Only if it is written into the contract that they can take back overpayments, has this been established?
I can`t see anything in my contract about overpayments but I`d be extremely surprised if there doesn`t turn out to be some loophole somewhere.
Only if it is written into the contract that they can take back overpayments, has this been established?
That is not true. Not everything covering employment law in included in your contract. The employer has a duty to provide you with an itemised payslip on or before payday - bet you that isn't in your contract. Nor will other 'mundane' matters like H&S or provision of toilets. Remember also that custom and practice has some legal status (although not relevant in this case).
Regardless, if it is a 'mistake of fact' then recovery is possible. There are ways to try and get out of it, but the employer is still within their rights to seek recovery.
If you want to be a little, er awkward you could ask for a breakdown of each month's payslip including each over payment for the sick pay and the up c0ck that's been ongoing for nearly 3 years. And if everyone did it, and asked for the Trust's payment details to HMRC you might just get the Trust to negotiate some middle ground in this.
Did my Dad's tax for a few years. If I was just around the corner I'd offer to have a look at the calcs the Trust have given you.
I can`t see anything in my contract about overpayments but I`d be extremely surprised if there doesn`t turn out to be some loophole somewhere.
The Trust HR handbook will include a huge amount of stuff that isn't on your contract but will still be included in your T & C's - probably via a one liner in your contract refering to the hnadbook..
As an employment solicitor....(who acts for NHS Trusts) does your contract allow for deductions from wages? Bet it does!
If so, your employer is being reasonable taking it over 36 months. Would you be so good if you realised it was an underpayment? If the amount will cause you hardship then speak to HR.
Speedy Claire
09-09-10, 08:52 PM
If you want to be a little, er awkward you could ask for a breakdown of each month's payslip including each over payment for the sick pay and the up c0ck that's been ongoing for nearly 3 years. And if everyone did it, and asked for the Trust's payment details to HMRC you might just get the Trust to negotiate some middle ground in this.
Did my Dad's tax for a few years. If I was just around the corner I'd offer to have a look at the calcs the Trust have given you.
Thanks Brian thats very kind of you to offer... even if you saw what i`ve been given I can`t honestly see how it explains the overpayment :confused:
Speedy Claire
09-09-10, 09:00 PM
As an employment solicitor....(who acts for NHS Trusts) does your contract allow for deductions from wages? Bet it does!
If so, your employer is being reasonable taking it over 36 months. Would you be so good if you realised it was an underpayment? If the amount will cause you hardship then speak to HR.
Yes I agree that it`s reasonable to take it over 36 months... I have no arguement with that. My query was can they legally take it to which the answer is yes and my other query was can they still recover money from 4 years ago to which the answer also appears to be yes.
No the amount won`t cause me hardship but that to me is irrelevant. Before any money is deduced from my wages I want a satisfactory explanation as to what the actual overpayment error is, how that error was made and what steps will be taken to ensure it doesn`t happen again. Would you be happy to have money deducted from your wages without an adequate explanation?
Claire - you need to speak to Ed. Employment law is, IIRC, his strong suit.
HTH
Speedy Claire
09-09-10, 10:02 PM
Claire - you need to speak to Ed. Employment law is, IIRC, his strong suit.
HTH
Many thanks... I know he`s busy with his new house tho so I didn`t like to PM him. Maybe i`ll ask him if he can give any advice when he has a bit of time. I have until October before they start the deductions.
MisterTommyH
09-09-10, 10:52 PM
They won't be able to deduct it from your future wages is you leave, find a job with another trust etc....:-dd
Kilted Ginger
09-09-10, 11:46 PM
not a legal egale but i dont think so. they can ask for you to repay the money but if you dont agree they may have to take you to court unless its in your hr booklet / contract..
like someone else said what would they do if you leave
BigBaddad
10-09-10, 05:53 AM
Lets hope you're not one of these people that's been under paying their tax.
Stinks of Labour inefficiency.
Speedy Claire
10-09-10, 06:32 AM
Lets hope you're not one of these people that's been under paying their tax.
Stinks of Labour inefficiency.
That`s one of my worries! I think somebody said earlier in the thread that it`s all very well asking HMRC to investigate to see if there`s a rebate due but what if they uncover something and I end up getting hit with a bill :smt120
I`m fortunate in that my overpayment (though big enough) is nowhere near as big as some of the nurses.... some people owe more than a months salary. They must be worried sick and it`s the staff on nights that I`m really worried for, they receive a lot more money in unsociable hours payments than day staff so if we`re going back 4 years I dread to think what their overpayment might be!
Yes I agree that it`s reasonable to take it over 36 months... I have no arguement with that. My query was can they legally take it to which the answer is yes and my other query was can they still recover money from 4 years ago to which the answer also appears to be yes.
No the amount won`t cause me hardship but that to me is irrelevant. Before any money is deduced from my wages I want a satisfactory explanation as to what the actual overpayment error is, how that error was made and what steps will be taken to ensure it doesn`t happen again. Would you be happy to have money deducted from your wages without an adequate explanation?
I agree with you - ask for them to explain those answers. Only questions are did you raise the overpayment with them beforehand and have you spent the money?
On the assumption you have spent the money, then you may have a defence against the repayment on the basis that there has been 'a change of position' (the fact the overpayment was over a period of years may help), however you would be developing the law as you went along (which wouldn't be cheap). Unfortunatly, the end result is: whilst it is worth querying the issue with HR, if they refuse to back down do you want to rock the boat with your employers and are there enough of you to make fighting the case worth it?
On the assumption you have spent the money, then you may have a defence against the repayment on the basis that there has been 'a change of position' (the fact the overpayment was over a period of years may help),
As a solicitor, would you not agree that if it is a mistake of law (if it is WTD related) then recovery is not possible. The change in position could work for mistake of fact.
Firstly (correct me if I’m wrong), but your comment is more relevant to a defence by a employer against a claim made by an employee for an unlawful deduction of wages – i.e. an unlawful deduction form wages claim can only be made if there was a ‘computational error’ in payment. An error by the employer in understanding how to calculate pay is not the same – they believe they have worked it out correctly. This therefore applies to the situation where an employer has incorrectly calculated the employees pay too low and the employee claims for the extra. (They should claim for breach of contract)
But (please correct me) it does not appear to have the same affect on the reclaiming of an overpayment of wages by the employer. The overpayment made, for whatever reason, was paid in connection with her employment and therefore are wages. Wages can be reclaimed under s.14(1)(a) of the ERA 1996.
Please do let me know if I’m getting the wrong end of the stick though.:smt120
Claire - been there and had it done. THe union at the time stated that despite it being their mistake they were entitled to claw it back. However I was advised to sit down with payroll with union rep and work out the amount I was going to pay it back in. We used the defence that the period of time that had elaspsed along with the wage increase meant that i had adjusted my spending and therefore could not pay back the amount the employer suggested.
best course of action to agree to it but on your terms - My employer wanted me to pay back at £250 a month I ended up paying back at £100. Don't do anything though with a union rep and get it all backed up in writing and signed
Don't do anything though with a union rep and get it all backed up in writing and signed
Think you may mean "without"?
That`s one of my worries! I think somebody said earlier in the thread that it`s all very well asking HMRC to investigate to see if there`s a rebate due but what if they uncover something and I end up getting hit with a bill :smt120
This is why you need the calculations explaining and verifying to your satisfaction. Once you get to that stage you can use the same calculations as the basis for a claim back of any overpaid tax. I think for previous tax years that claim has to be done on a personal basis, the company cannot make it happen (although occasionally the HMRC have been known to catch up and send a cheque out of the blue, but you will be waiting for a number of years before that might happen!)
I believe tax is always a personal liability, but if you are PAYE only I imagine you would have a good consequential claim against you employer if they had made incorrect tax underpayments and you found yourself with a bill. Make sure you have your P60s, P11Ds for the affected years to hand.
(Disclaimer: I'm not professionally qualified in law or acountancy and my comments are only offered from my pool of bitter personal experience. Please double check everything I say before you act on it and feel free to rollock me if I'm wrong.)
Speedy Claire
10-09-10, 06:57 PM
Many thanks to everyone for all your input and advice. Simon has very kindly looked over the paperwork for me and has explained what all the figures are. I know that unless the PCT drop this claim then i`m going to have to pay it and I`m very fortunate as it will only be a very small amount each month that is taken out. Union Rep is coming on Monday to give us some advice and we are going to request individual advice re. the tax issues.
There are now nearly 400 District Nurses who have received notification of overpayment letters, I`m absolutely gutted for a few of my friends who work nights... they have been told they will have to repay almost £4,000 each! I`m extremely lucky I moved onto days!
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