Ca. Labot Code 221 says:
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.
This only applies to EARNED wages, not wages paid out in error.
Therefore, you'll have to give the money back. However, I agree with you that you should only have to pay back the original amount - no interest. This was not your fault and you tried to immediately notify them of the error. It took the company 6 months to get around to it and you should not be penalized for their delay.
Therefore, you should offer to pay back the original amount issued. I don't think a court would award them anything more because the origination of the problem was by their mistake - you should not be punished for that.
Lawyer
Litigation Attorney