Employee Forced To Reimburse Due To Error

September 21, 2012 8:24 PM

What can I do to help prevent an employee I supervise from having to reimburse a ton of money due to an error in my supervisor's office?

This is a bit long and I'm going to be a little vague about a few details for "there is no anonymity on the Internet" reasons. I'm happy to answer questions for clarification and will respond privately if I think answering them publicly could turn this into an even bigger problem.

Two years ago, our organization announced a major change in our schedule. There were a number of important adjustments we had to make, but one employee in particular was going to have her hours changed somewhat.

In discussing things with her immediate supervisor (I'm one level of middle management removed from her), we agreed that the amount of work she did was so high and the importance of her to the company was so great that, despite this change in hours, this employee should be paid the same amount.

In March 2011, I contacted my immediate supervisor and proposed that this employee should maintain the same salary despite the change in hours. My immediate supervisor said "let's meet." When we met, she agreed that this was the right decision and said "I'll see what I can do."

In August of 2011 (when the new schedule was officially implemented), I sent a reminder e-mail to my immediate supervisor.

Well, I didn't hear back from her, but when the first pay period came, my employee was being paid the same. I didn't think much of it at the time, just "Oh, it was taken care of, good." This was my immediate supervisor's standard way of working.

This past August 2012, a new supervisor took over my immediate supervisor's position. In the meantime, we'd discovered that there were about a dozen absolutely essential things that my old immediate supervisor had promised us that she'd never followed up on, so my department was already in a bit of disarray.

My employee got her first August paycheck and there was huge drop in pay - around $15K calculated for the whole fiscal year. I called the new supervisor and he said "that's what she should be paid according to the contract."

I shared the email trail with him and he felt that my previous supervisor had overstepped her bounds by keeping her pay the same. I made the arguments that this employee had a unique, very hard to replace skill sets and (furthermore) that we'd probably need three different people to cover all of the different things she did - a significant increase in cost.

Well, long story short, he went to the CFO and the CFO decided that not only should we pay this employee the $15K for this fiscal year, but that the her pay last year was actually based on a clerical error in our immediate supervisor's office. He announced that he was going to expect this employee to pay back the 15K.

"We can stretch it out over three years, though," he explained, "to cushion the blow."

He and the big boss also explained to me that their lawyer said they had the right to take this money back and that they'd taken back (much smaller) amount of over-payments before.

I expressed that I have a serious moral issue with this, but the CFO explained to me that this was like asking the Supermarket to reimburse you if you overpaid them accidentally. He doesn't feel he's punishing the employee or that she's done anything wrong, its just its the organization's money. Doesn't matter who made the mistake, its the organization's money.

This employee went from $50K a year last year to $35K a year in August due to this "clerical error." Spreading out $15K over three years reduces her salary to $30K a year. She's doing the exact same amount of work. I estimate that replacing her will cost our organization at least $75K a year.

I asked if they could take it out of my salary instead and they went on about how the auditors wouldn't like that or some such nonsense, essentially saying that wasn't an option.

I'm this close to submitting my letter of resignation over this situation. I find it morally repugnant and its not helped when the Big Boss says things like "its a shame she's such a great employee or this wouldn't be so hard."

Any advice about how I can help protect this extremely valuable employee?

posted by Joey Michaels to work & money (39 answers total)

What has your company's lawyer, accountant, or your union representative said?
posted by These Birds of a Feather at 8:29 PM on September 21, 2012 [3 favorites]

After you've done what you can to protect your employee, absolutely quit. It will eat your soul, working for these people.
posted by zjacreman at 8:30 PM on September 21, 2012 [19 favorites]

It sounds as though your employee needs a lawyer to examine this "contract" they claim to have, and to determine what her rights are. She shouldn't talk further with the company about the situation, and neither of you should agree to anything, until she's consulted with that attorney.
posted by decathecting at 8:33 PM on September 21, 2012 [7 favorites]

The lawyer says they are allowed to do this. The accountant says that they are allowed to do this and have done this in the past.

Because of the unusual nature of her job, she's not actually eligible for the union - she's paid partially as an independent contractor, partially on an hourly scale, and partially on union scale for the three different jobs she does for us.

We've put together a comprehensive description of her position that breaks up her duties based by pay scale and demonstrated how her work should be compensated at the higher rate. This was the evidence we used when we made our case to my old supervisor in March 2011. The current supervisor and the CFO claim to have never seen that before August 2011 and don't feel bound to it.
posted by Joey Michaels at 8:35 PM on September 21, 2012

Tell your (firm's) employee that she should speak with an attorney experienced in representing employees in similar matters.

You cannot effectively represent her interests, your own, and the firm's interests at the same time in even an informal capacity. This is not a criticism of you, just an observation that applies to everyone equally when in your shoes.

The lawyer says they are allowed to do this. The accountant says that they are allowed to do this and have done this in the past.

They work for the company. They do not represent and have no interest in the affairs of this employee. She should only take advice from her own attorney.
posted by Inspector.Gadget at 8:37 PM on September 21, 2012 [38 favorites]

Make sure the employee has the email chain and any other evidence that she had a contract to keep her salary. If she doesn't have this (she might regularly clean out her email), make sure she is able to re-obtain it, preferably in a way that doesn't implicate you :-(
posted by anonymisc at 8:37 PM on September 21, 2012 [5 favorites]

Which lawyer said that? The company lawyer? Get an outside opinion.
posted by triggerfinger at 8:38 PM on September 21, 2012

triggerfinger - I was responding to These Birds of a Feather's question - I should have specified that. The company lawyer.
posted by Joey Michaels at 8:39 PM on September 21, 2012

The company's lawyer says they are allowed. She needs her own lawyer who doesn't work for the company. In some jurisdictions, wage garnishments for overpayments of past wages are dramatically limited. In some jurisdictions, they require the employee's permission, and if that permission isn't granted, the company's recourse is to sue. In some jurisdictions, clerical errors by the company are not a permissible reason for wage garnishment at all. Your employee should learn what the company is and isn't allowed to do from her own lawyer, who works only for her. She should find out whether there are limits on wage garnishment in her state. She should find out what will happen if, for example, she quits her job now or before the money has been repaid. She should find out whether she has the right to contest the garnishment in court before it happens. In other words, she needs to know what rights she has, and she needs to learn that from someone who is qualified in this area and who is unaffiliated with the company. That's not you, and that's certainly not the company's lawyer.
posted by decathecting at 8:41 PM on September 21, 2012 [21 favorites]

A lawyer will be able to tell you whether the argument that this is a mere "clerical error" holds water, as well.
posted by grouse at 8:55 PM on September 21, 2012

The company's lawyer is NOT the employee's lawyer. Not even a little bit. And you are not the employee's lawyer either. If the employee has a beef with the company, she needs her own lawyer. The longer you dick around and "help" her, the worse her position is likely to become.
She has a choice to suck it up or fix it, and the sooner she decides (with appropriate investigation beforehand) the better off she's likely to be.
(IANYL, TINLA.)
posted by spacewrench at 9:07 PM on September 21, 2012 [4 favorites]

Oh lawyer for sure, and I'm pretty sure "wage garnishment" is getting way ahead of the ball here. The problem is between the company and ex-supervisor, who apparently had the power to keep the salary the same. If the company has a quibble with that decision, then that's their avenue to take. Certainly the company may be able lower her salary, whatever, but to claw back that past stuff that was granted with full-knowledge of a qualified member of management is beyond the pale. I'd also look at the rights the employee has in your state regarding unilateral changes in compensation like that. Get free consults from two or three or four employment lawyers, preferably the the biggest dicks in the phone book.
posted by rhizome at 9:08 PM on September 21, 2012 [6 favorites]

Print out the email trail and give it to her, tell her to get her own lawyer, and the consider your part finished. As said above, you can't represent her. You can't make this all work out. She needs to get a lawyer to represent her, and then you'll have done what you can do.

Quitting will feel good, and likely be good for your long term mental health because you'll have difficulty feeling good about this employer going forward. It'll also make a nice object lesson for them in the costs of these sort of spreadsheet-driven, inhumane decisions. But do it for yourself, not because you think it'll make everything work out.
posted by fatbird at 9:24 PM on September 21, 2012 [7 favorites]

She needs a lawyer and a new job.

You just need a new job.

Good for you for standing up for what's right.
posted by alms at 9:26 PM on September 21, 2012 [59 favorites]

I think alms got it all in 3 sentences.
You could bat this around for years, but it's not that complicated. The company offered her a salary, and now the company wants to take it back. Doesn't matter which personnel are running the company. You shouldn't be working for a company like that, and neither should she.
posted by LonnieK at 9:42 PM on September 21, 2012 [1 favorite]

This is such a clear cut case of "she needs a lawyer!"

Good on you, that you are standing up for this person, but you need to pass on all of your emails to her and bow out.

You probably will also need your own attorney at some point, as doubtless you'll be testifying or similar on her behalf.

Yes. You should start looking for a new position. I'm sorry that doing the right thing is going to cost you, but trust me, I believe you stand for what is right here, and you will ultimately land in a better spot.


Here is what is bothering me, though.


Why on Earth would you take what the company's lawyer and accountant say as Truth? And stop being stuck on how many people it would have taken to replace this employee and all that jazz. You are so decent, you fail to see how indecently corporations and the people who labor within them behave on a regular basis. Your arguments are falling on deaf ears because they don't care about what is right, or even what is fiscally responsible. For them it is ego, and weirdness, and taking advantage - and that is where their thinking ends on the matter.

Once proper employment attornies get involved, all that matters is the contract, the agreement with the former supervisor, and your email trail + whatever the former supervisor is willing to admit to on the record. That's it. That this employee has provable specialty skills is secondary because the company is free to spend whatever, on whomever, to have tasks completed at their whim, whether it is cost-effective or not. You are arguing this as if it is still last year and the matter is still up for debate internally within the company, meanwhile, that ship sailed long ago.

What the CFO and new supervisor are proposing is stealing, since they accepted the work the employee completed and compensated her regularly. Subject to whatever the contract says (it is not clear the employee agreed to a paycut, it seems the employee agreed NOT to accept a pay cut) THIS IS WHY SHE NEEDS A LAWYER TO ADVOCATE ON HER BEHALF.

I just wanted to add that, sadly, I've seen similar questions here on the green, but your employee is in the best position to fight this and win of all the scenarios I've seen described here, provided she retains proper legal representation.


Again, you are a very decent human being. Thank you. Sorry this happened.
posted by jbenben at 10:33 PM on September 21, 2012 [14 favorites]

Your employee really needs an employment lawyer in your jurisdiction. They'll be able to tell them excatly what they can expect as far as requirements to pay back and whether the company can change their salary. For example here In BC an error in wages paid is only able to be clawed back for six months. With 15 grand at stake an hour with a lawyer will be a very good investment.
posted by Mitheral at 11:33 PM on September 21, 2012

Everyone else has already said what I would have said, but I wanted to add one more thing: in case you haven't done so already, send those e-mails to another non-work account so that even if something happens to them, you've still got a copy.

And thank you for being a decent person.
posted by hurdy gurdy girl at 12:31 AM on September 22, 2012 [6 favorites]

I'm sorry for both of you.

I am repeating what everyone else has said for emphasis. She needs a lawyer. It doesn't matter what the company's lawyer says. Someone needs to advocate for her position. Legal rights are rarely crystal clear and the company's lawyer has one client in mind: the company.

Tell her to get a lawyer. Make sure you get a copy of all the relevant emails and other records and pass them on to her lawyer once she has one. I don't know where you are, but if this goes to litigation, make yourself available for deposition testimony, etc.
posted by murfed13 at 12:32 AM on September 22, 2012 [1 favorite]

I have had jobs where I might get a few hundred pounds more than expected in my pay, usually due to clerical error linked to a pay rise or overtime or some such. It would be sorted out the next month after discussion with me as the employer, which was fine as I knew it was never my money.

This situation is very different. The employee has had an expectation of higher pay and this expectation has been met by the salary received over an extended period. The lawyer's opinion you ate getting cannot be trusted, as everyone is saying, employee needs opinion of lawyer who has employee's best interests.
posted by biffa at 1:31 AM on September 22, 2012 [2 favorites]

She should contact the union/union reps anyway. They can probably recommend an employment attorney or two and might have other helpful resources. Many union employees do it because they are passionate about situations like this one. If not, well, the worst they can say is "no."
posted by the young rope-rider at 2:40 AM on September 22, 2012 [1 favorite]

Yes, she needs to call a lawyer.

You should

- give her copies of all the documentation you have
- tell her you will be happy to work with her lawyer to produce any other necessary documents, including, possibly, an affidavit
- DO NOT TELL ANYONE ELSE YOU ARE DOING THIS
posted by miss tea at 3:51 AM on September 22, 2012 [2 favorites]

(IANYL, TINMLA)
posted by miss tea at 3:52 AM on September 22, 2012

IAAL and I second what miss tea said. Especially that last part. Also, the employee should probably lawyer up ASAP just in case the employer is already sandbagging.

(IANYL, TINLA)
posted by AV at 6:00 AM on September 22, 2012

IANAL, but a lawyer could subpoena records which at some point the old boss may have had to submit or approve a list of the new lower salaries. If there is evidence that they approved changes a year ago and neglected to list her salary as changed, and if even one other employee not mentioned on the list maintained their old salary that would be evidence that they allowed others not named. so unless they are going after all of them she should be allowed to keep what she has been paid.
posted by Gungho at 6:34 AM on September 22, 2012

The problem is between the company and ex-supervisor, who apparently had the power to keep the salary the same.

This is the answer. As far as this employee, you and your boss were concerned, she was being paid the right amount of money. Just because a new boss came in and found that his predecessor was doing something that he doesn't like is no reason to punish this person.

The only other possible solution is to offer the employee a raise that's the same as the garnishment will be so that her take home will be the same. Then, in three years when it's paid off, she has a nice fat raise to reward her for the company's stupidity. Everyone gets to save face.
posted by gjc at 6:49 AM on September 22, 2012

IANAL but IAAC. I am a contrarian. I think the employee should definitely lawyer up, but I'm curious as to when she(the employee) knew about the schedule/salary change. If she knew about the situation a year ago, I believe she has less credibility in claiming it came out of the blue. She's been knowingly banking extra money. Also, if you're her manager, I applaud your concern for the employee, but I would make sure that you don't become the scapegoat in this situation. Make sure your paper trail covers you first then the employee. Otherwise, you're both screwed.
posted by pentagoet at 6:49 AM on September 22, 2012

The company's lawyer is NOT the employee's lawyer. Not even a little bit

This is a good point that I'd like to elaborate on because it touches on a very common misconception about the law and what lawyers do.

This idea of the law as an entity that says one thing is legal and another thing is illegal is a myth. There is no monolithic "law," there are only a bunch of grey areas. The answer to the question "is this legal?" or "can they do that?" is always, it depends.

When a client asks for advice on a course of action in most cases what they are really asking is whether there is any legal basis for what they have done or are about to do. And because there usually is some basis (see above) the lawyer's advice to them generally consists of explaining what the basis is, what the risks are, and making a recommendation based on that; which it is entirely open to the client to heed or disregard depending on if they are comfortable with the risks (or, frankly, if they even read the opinion letter to the end).

Of course all that information is privileged and confidential; so the "yes, but" and the "no, if" doesn't get shared with anyone. And it is not unheard of for people to say they've talked to a lawyer when they actually have not.

This is why many people are recommending lawyers for all involved. And more generally, why it depends is usually followed by talk to a lawyer.
posted by AV at 6:55 AM on September 22, 2012 [4 favorites]

You employee needs to speak to her own attorney. You should have no role in this other than to advise her to seek independent counsel.

I would also second the suggestion that you seek employment elsewhere.
posted by dfriedman at 6:55 AM on September 22, 2012

The new supervisor said "That's what she should be paid according to the contract."

What new contract? Did your employee sign that contract? Did she even see it? Surely there must have been memos etc going to staff about changes in hours and pays. Where are they?
posted by ThatCanadianGirl at 8:19 AM on September 22, 2012

Thank you everyone for your input. A few other points of clarification.

The contract at this organization is a monolithic single document signer between management and the union once every few years. Because this employee is paid in three different ways (see above) and two of those ways fall outside the contract, she's always existed in a kind of grey area. There is no paper trail from when she was hired (10 years ago) because my predescor preferred to work with verbal agreements.

This employee had been told by myself, by her direct superviser and by my old direct superviser that he salary would remain the same going into August 2011. Nobody gave her a reason to think otherwise. Her P20 9salary document) was signed by my old supervisor in August 2011 and reflects the salary she was paid. The hours on this P20 match her 2010-11 hours but employees are never shown their P20s - nor am I shown anyone's P20s.

I have worked at this organization for two decades and while there have been many issues, they've never (to my knowledge) tried to do something like this before. It would be reason to leave on its own, but its kind of the straw that broke the camel's back for me. I love the people and the mission of this place, but you don't treat people like this.
posted by Joey Michaels at 12:22 PM on September 22, 2012 [1 favorite]

As others have pretty much said -- you have a lot of integrity, and it's gratifying to see.

You might want to double-check with your own attorney to keep your own ass covered, and I would resist the urge to do anything clever or tricky (don't meet her in a parking lot in the middle of the night while wearing a trenchcoat to hand her a manila folder of secretly-copied emails). Whatever you do should be above board, and you should be sure you'll be comfortable--and protected--owning it if you were ever deposed.

IANAL but I sure talk to a lot of them.
posted by A Terrible Llama at 2:50 PM on September 22, 2012 [2 favorites]

Rough situation. Besides the above, can the union possibly obtain a write-off informally? Can the three years be stretched out much more? 10 years, even 15 is heard of if the repayment is hardship?
posted by michaelh at 3:46 PM on September 22, 2012

Her P20 9salary document) was signed by my old supervisor in August 2011 and reflects the salary she was paid. The hours on this P20 match her 2010-11 hours but employees are never shown their P20s - nor am I shown anyone's P20s.

So two-thirds of this woman's hours, duties and employment conditions are NOT governed by the union contract (ie, one-third of the time she is a "Union Pipe-fitter" doing union pipe-fitter things, and two-thirds of the time she is a Pipe Contractor or a Pipe Consultant, and she can do non-union things?) that your new boss is so enamored of, and a representative of management signed a document indicating that this employee's salary was $50,000, not $35,000? And all involved parties communicated this in email? And now there's a new sheriff in town, and not only does he want to give her a $15,000 pay cut, but he wants her to pay the company $15,000 for the privilege?

Yeah, your employee should get her own employment lawyer and not pay back a single effing' dime to these people. Unfortunately, you now know that you work for a bunch of snakes and thieves and you and your employee will probably end up on the job market. But at least you'll be able to sleep at night.
posted by Snarl Furillo at 5:25 PM on September 22, 2012 [5 favorites]

It strikes me that if the employee quit immediately they would have to sue to get that money back and what exactly is their case?
posted by oddovid at 4:29 AM on September 23, 2012

If she knew her salary was going to decrease by about 30%, she would have spent the last year busting her ass finding better employment. Any judge is going to be sympathetic to that fact. And the fact that she never realized her salary was going to drop only bolsters the claim. 3-5%? Maybe. 30? I don't care how anti-labor you are. That gives you pause.

Once they realize it would go to court, I think the company lawyer and accountant will realize how stupid their initial analysis of the situation is. (I am not a lawyer. But I deal w/state and local bureaucracy plenty)
posted by politikitty at 9:11 PM on September 23, 2012 [1 favorite]

Update: I made the recommendation that she seek out a lawyer to look out for her interests. I confirmed she had email trails of everything that had gone down. She walked, which now has my bosses pulling their hair out as its just dawning on them now that she can't be replaced easily or quickly and her absence majorly screws the company.

One said to me yesterday "wow, replacing her really is going to cost a lot more. I didn't think she'd quit."

So basically they were playing chicken and lost, at least from my perspective. Of course, really, nobody won here.

Working on my resume and thank you all for your suggestions. I think, ultimately, getting a lawyer this really will help her more than anything I could have done. Sincerely, thank you.
posted by Joey Michaels at 1:42 PM on September 25, 2012 [7 favorites]

LOL. Kinda seriously, this is probably a great time for you to ask for a raise.
posted by rhizome at 2:04 PM on September 25, 2012

Also, a 30% salary drop would be large enough to constitute constructive dismissal in many jurisdictions. She should file unemployment for the interim.
posted by politikitty at 2:07 PM on September 25, 2012 [3 favorites]