What to do when employees get more than they deserve

Regardless of the reason for overpaying an employee, payroll departments must follow the rules for handling, recovering overpayments
By Sheila Brawn
|Canadian Payroll Reporter|Last Updated: 01/30/2015

Mistakes happen. No matter how careful payroll professionals are, sometimes they inadvertently pay employees more than they should. Through a data entry mistake, a company may accidently pay an employee $3,500 instead of $350. Payroll may erroneously pay an employee a premium for working on a statutory holiday when the employee was not eligible for it.

Not all overpayments, though, are the result of administrative errors. Sometimes, they stem from employers paying employees in advance for duties they end up not doing. This could happen if an employee takes a paid vacation and the employee later quits before earning the vacation.

Whether salary overpayments result from errors or employees not performing duties, payroll departments have to ensure they follow Canada Revenue Agency (CRA)/Revenu Québec rules and employment standards requirements for handling and recovering them.