California Employment Law
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Thank you. If the money was paid to you by mistake, you have to pay it back regardless of whether you're an employee or contractor. Simply put, the money is not earned and is not yours. Just as you wouldn't acquire ownership of someone's wallet if they left it in your house, the law treats overpayments the same way.
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You don't have to accept anything. However, they can choose to file a lawsuit against you at any time. And if they can prove that you intentional refused to repay them, it might even be possible for them to recover punitive damages, meaning damages above and beyond the actual overpayment intended as a penalty for "willful conduct."
You are welcome. The good news, if you can call it that, is that most employers really don't want to file lawsuits. The process is expensive and time consuming. This fact gives you some amount of leverage in negotiating payment terms. Your employer is going to want to work with you because their alternative of filing a lawsuit is not going to be very appealing to them.
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Very best wishes.