Employment Law Questions? Ask an Employment Lawyer.
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Legally you cannot keep a check to satisfy an unintentional overpayment unless you have a dispute procedure in place. NY DOL regulations state "For deductions due to overpayments or advances, employers must develop and follow a dispute procedure by which the employee may dispute the overpayment or terms of recovery, seek a delay in the recovery of such overpayment, or dispute the amount and frequency of deductions for advances that are not in accordance with the terms of an authorization for such advance. Failure to follow the procedures set forth in the Regulations will create a presumption that the deduction is impermissible."
Thus, legally unless you have such dispute procedure in place, such deduction would not be allowed. If you do not have such a procedure, then you'd have to pay the last paycheck, then pursue the employee in civil court for the overpayment. You could try to just attempt to hold the last paycheck and see what the employee does (threaten them with criminal prosecution), but if they file a charge with the DOL I'd suggest paying it immediately because you will lose there and may owe a penalty as well.
You can theoretically file a police report for the overpayment, in most instances the prosecutor will not file a charge in these instance because they don't believe hey can show it is a matter of criminal intent (versus a business dispute). In most instances even the police will try to dissuade you from filing a report because they'll state it's a criminal matter.
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