I overpaid my employee in error!!

Is is possible to make mistakes when calculating salaries and wages. It can also happen that the employer only realises the overpayment after several months. Does this mean the employer has to carry the loss or may the employer request the employee to pay back the overpaid amount?

• A deduction that may be made if the employee agrees in writing to the deduction
• A deduction permitted in terms of legislation, a collective agreement, court order or arbitration award, in which case no consent is required by the employee.

When do I need the employee’s consent to make a deduction?

• The loss or damage occurred in the course of employment and was due to the fault of the employee
• The employee is given a fair opportunity to explain why the deduction should not be made
• The amount deducted should not be more than the actual loss or damage suffered
• No more than 25% of the remuneration is deducted per month until the final amount is paid

When can I make a deduction without the employee’s consent?

When the employer made an overpayment as a result of an error in calculating the employee’s salary or wage, the deduction to recover the overpaid amount is permitted by law and may be made without the employee’s consent. We advise employers to consult with the employee with regards to the error in payment and reach and agreement on the recovery of the overpayment.

What if the employee refuses to repay the money?

If the employee refuses to repay the overpaid salary or wage or does not agree to the repayment terms, the employer may proceed with making the deductions form the employee’s salary or wage, provided that the amount deducted is reasonable.

Contact the LWO to ensure that you limit your risk and always follow the correct procedures.