My company has recently discovered that it has overpaid hourly union employees as far back as 1999 when our current payroll system was implemented. The reason is complicated but it has to do with the greivances due to missed Overtime. I’ll try to explain better in a subsequent post if it is important
The company wants to be paid back and will start payroll deductions of up to $100/week until the employees debt is paid off.
My question. Assuming the company’s mistake is valid, Is it legal to do go back as much as four years for redress?
If they were underpaying (which happens quite often due to a very complicated contract), it doesn’t take long for the affected employee to call the payroll department.
Well, according to this guy, the federal statute of limitations for the recovery of back labor is two years, unless the underpayment is willful, in which case it’s three years.
The threshold question is whether the company can rectify past overpayments with current payroll deductions. Is this explicitly authorized by the collective bargaining agreement?
In any event, I suspect that such deductions (absent authorization) would be illegal in most jurisdictions. In most jurisdictions, the employer’s remedy would be to file suit against the employees, probably for unjust enrichment.
IIRC, there is (generally speaking) no statute of limitations for unjust enrichment, but the defense of “laches” is available. You might also check to see if the CBA provides a time limit.