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socrateaser
socrateaser, Lawyer
Category: California Employment Law
Satisfied Customers: 38132
Experience:  Retired (mostly)
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I terminated my employment with my previous employer in nov

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I terminated my employment with my previous employer in nov 2011. In jan2012- feb 2012, I received three overpayment paychecks from them through direct deposit. The total gross amount was$20k, the bank direct deposit amount was$11k. The rest of the money went to tax, 401k, and miscellaneous benefits that I did not ask for. I just received a W-2form from them in Jan, 2013. A week later, I received a letter stating that the paychecks are overpayment, and they asked for $20k back. I lived in California. Questions: 1. Do I have to pay anything back? If so, what amount should I negotiate to pay? 2. What recourse do they have to collect the money in ca?

I need a CA lawyer to answer my question.


Thank you.
Sandie
Questions: 1. Do I have to pay anything back?

A: You owe the overpayments to the employer, unless you can show that they were intended as part of your compensation agreement.

If so, what amount should I negotiate to pay?

A: Legally, you are obligated to repay the entire overpayment, to the extent that it was not earned by you in exchange for services rendered to the employer. However, if your employment contract does not contain a prevailing party attorney's fee clause, then the employer will have to pay a substantial amount of legal fees to try to collect from you, unless the employer limits its claim to the maximum small claims jurisdictional amount, which for a private business entity is $5,000.

I would estimate that a lawyer would charge at least $10,000 to try to collect. So, you could use this as bargaining leverage to negotiate the amout you would agree to return. But, if the employer actually sues you in Superior Court, you may be ordered to repay all of the overpayment -- and you would probably have to hire your own lawyer to defend against the lawsuit, which would cost you as much as it would cost the employer.

2. What recourse do they have to collect the money in ca?

A: Answered above.

Hope this helps.
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