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Tina, Attorney
Category: California Employment Law
Satisfied Customers: 33167
Experience:  JD, 17 years experience & recognized by ABA for excellence in employment law.
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I am currently working on a contract for an employment agency.

Customer Question

I am currently working on a contract for an employment agency. I signed a contract to be paid $45 an hour. The employment agency incorrectly input my hourly rate at $66.20 an hour. I was working a lot of overtime and I honestly did not think I was being overpaid. After 6 months, the agency contacted me stating I owe over $21,000. What are my rights in this situation?
Submitted: 5 years ago.
Category: California Employment Law
Expert:  Tina replied 5 years ago.
Hello and welcome,

If the amount you were overpaid is not in dispute, you would typically be required to repay the amount you were overpaid to the employer.

Six months is normally not an unreasonable time for the employer to identify the overpayment and the law does impose an obligation on the employee to recognize whether they are being paid properly as well.

You could wait for the employer to file suit against you seeking a judgment for the amount owed, but a judgment would negatively affect your credit rating.

Since seeking a court order can be expensive and time-consuming, you do have some leverage to negotiate a settlement and release of claims with the employer in an attempt to avoid litigation.

If you can pay a lump sum, that would typically be best to offer, or a smaller lump sum along with incremental payments for the remainder.

The employer is likely to waive interest since it was their error, but will likely demand at least 75% of the amount be repaid.

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Tina and other California Employment Law Specialists are ready to help you
Expert:  Tina replied 5 years ago.
Here is a link that sets out the limitations for recouping the overpayment under CA law. Generally, the employer must obtain an agreement from you in writing before taking deductions from you pay: