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Patrick, Esq.
Patrick, Esq., Lawyer
Category: California Employment Law
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Experience:  Significant experience in all areas of employment law.
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I recently left a long term job on good terms. They failed

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I recently left a long term job on good terms. They failed to process my exit paper work and continuned to pay me for 6 week after I left. I tried several times to contact HR to make them aware of the issue. they did not return my calls or e-mails. Now I get a letter that they want the money back. Do they have any legal right to collect the money? I point to California labor code section 221 "It shall be unlawful for any employer to collect or receive from an employee any part of wages theretofore paid by said employer
to said employee"
Submitted: 3 years ago.
Category: California Employment Law
Expert:  Patrick, Esq. replied 3 years ago.
Hello and thank you for entrusting me to answer your question.

Unfortunately, the Labor Code section that you have cited typically does not apply in the present instance. That Labor Code section is intended to protect current employees from having their paychecks docked for things like breaking dishes, etc. Section 221 forces employers to take any legitimate dispute about money they are owed to court, rather than to act as informal arbiters, deciding what they are and aren't owed and docking it directly from employee's paychecks with no judicial oversight.

The main difference in your situation is that your employer continued to pay you by error for 6 weeks. These are not "wages" that you were "owed," and so the purpose of Labor Code section 221 is not at all served.

In general, an employer has the right to recover monies mistakenly paid to employees. Their only recourse, however, would be to actually sue you. If you can argue that you "reasonably believed" you were entitled to the money, you may have a claim for detrimental reliance. (You relied on a mistake of another party to your detriment, and they are now estopped from trying to correct their error.) This is a common equitable doctrine in law and is widely applied across all areas. This will be difficult to argue, though, because you were no longer working at the company and for this reason, your belief that the money was given to you on purpose likely was not "reasonable," even after repeated calls to HR.

I realize this is not the news you were hoping to hear, but I hope that you appreciate receiving an accurate legal answer to your question and I hope that you will click "accept" so that I Can get paid for my time if my answer has been sufficiently clear. I wish you the best of luck.

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If my answer has been helpful to you, please click on the GREEN ACCEPT button directly above. I will not get credit for assisting you or receive payment for my work unless you do this. Your question will not close after you click "accept," and you will still be able to ask follow-up questions if necessary.
 
The only facts I know about your situation are the ones that you tell me, so please try to be specific and bear in mind that, occasionally, miscommunications will occur. I will do everything I can to clarify my answer if I have misunderstood your question. Also bear in mind that the law does not always read how we think it should. I ask that you be understanding if an opinion I have provided is not consistent with what you wanted to hear.
 
Finally, the information that I have provided is not legal advice. I am not acting as your attorney and my answer does not establish an attorney-client relationship between us. I encourage you to consult with a local attorney in regard to legal matters.
Patrick, Esq., Lawyer
Satisfied Customers: 7530
Experience: Significant experience in all areas of employment law.
Patrick, Esq. and other California Employment Law Specialists are ready to help you
Customer: replied 3 years ago.
The only other issue here is that I was told that I would be eligible for pro rated (6 months) of bonus pay out at time of separation. I have an e-mail from HR stating such. My contention is that bonus amount would significantly reduce my debt owed back to them. When I questioned this they said that it was a mistake to tell me that an the current policy does not qualify for the bonus payout in my situation.
Expert:  Patrick, Esq. replied 3 years ago.
Typically, upon severance from a company, bonus type payments are considered "vested" and must be paid to the employee if the payments were not discretionary. If it was something that you were promised while you were an employee and you worked toward it, you would typically be entitled to receive at least part of the bonus upon your termination. Otherwise, such payments may be withheld by the employer, typically.

Furthermore, California courts have specifically held that a “bonus” constitutes wages. See Ralphs Grocery Co. v. Sup. Ct. (Swanson) (2003) 112 Cal. 4th1090, 1103. Pursuant to California Labor Code §201 et. seq., if an employer terminates an employee, the wages earned and unpaid at the time of discharge are due and payable immediately. The California Labor Code goes on to provide for waiting time penalties, interest and attorneys' fees should an employer fail to timely page wages in whole or in part.

If your bonus payment was vested and your employer has failed to pay it, they may face the penalties described above. It may not be worth the risk to them to attempt to pursue the money mistakenly paid to you if they are incurring such risk of liability in the process.

I hope this helps, and please remember that the above does not constitute legal advice. Please also don't forget to click "Accept." Thanks so much.

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Patrick, Esq.
Patrick, Esq.
California Employment Lawyer
7530 Satisfied Customers
Significant experience in all areas of employment law.