Guernsey Press

Business panel: We’ve overpaid our staff – how to rectify the issue?

WE HAVE discovered that we have been over-paying a few staff members – to the tune of thousands of pounds for some. They all said they didn’t notice and they do overtime at various rates, so their salary varies. How do we solve this issue?

Published
(21762363)

Hana Plsek, senior associate at Collas Crill, replies:

WHILE you have a legal basis to get the money back from your employees, you don’t necessarily have the ability to simply reduce their salaries to do so. The legal concept of unjust enrichment, in simple terms, creates a right for an innocent party (the company paying too much salary to employees) to recover gains (salary paid incorrectly) unjustly received by the other party (the employees).

How this right is enforced is, ultimately, a rather tricky matter as going to court to enforce such a right is unlikely to be satisfactory for either side of a long-term employment relationship – and no matter how the error occurred, employees will never be delighted with the prospect of giving money to employers.

If your employment contracts go so far as to state that the company can recoup wrongly paid salaries from employees, this is a helpful start in letting you reduce salaries to rectify the situation. An offer that saw the employees paying off the incorrectly paid salary on a month-by-month basis at the same rate that it accrued would hopefully be viewed reasonably.

Sorry, we are not accepting comments on this article.