What Are Some Employmemt Laws About Overpayment of Wages?


Quick Answer

Under the Fair Labor Standards Act, employers can recoup overpaid wages by adjusting the employee's future paychecks without employee authorization, even if the adjustment results in a paycheck less than the minimum wage requirement, according to Lexology. However, laws regarding recoupment of wage overpayment vary from state to state.

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Full Answer

Some states expressly permit overpayment recoupment, explains Lexology. Other states, such as New York and Oregon, prohibit overypayment recoupment, as of 2015. Deviations from the views of the Department of Labor usually deal with the perceived nature of overpaid wages and the resulting adjustment. The Department of Labor states that overpaid wages are an advance or loan, with the future paycheck recoupment denoted as an "adjustment." Some states do not view overpayment as an advance or loan, and instead see the "adjustment" as an unlawful deduction.

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