Can overpayments made to employees in their salary be deducted from employees’ future salary payments by the employer?Posted in : First Tuesday Q&A NI on 3 June 2014
Most contracts of employment include a deduction from wages clause which covers this scenario, expressly stating that an employer can claw back any such overpayments.
Notwithstanding this, the general rule that employers cannot make deductions from wages unless it is permitted by a contractual provision does not apply to deductions to reimburse an employer for overpayment of wages or expenses.
Therefore, if it is a simple overpayment and the employee(s) should have known about it, then it shouldn't constitute an unlawful deduction from wages under the Employment Rights (NI) Order 1996. The issue that you should consider before recovering an overpayment by deducting it from the employee's
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Back to Q&A's This article is correct at 02/09/2015
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