Repaying overpaid salary - what is reasonable to be left with?

[ooohreally]

Friend of DD1 was furloughed. Except that it now turns out she wasn't eligible for furlough.

Employers say they have overpaid by £1000, and demanded instant repayment. However, DD1's friend only gets just over £800pm. So they have said she must repay at £500 pm for two months.

Is there a minimum that they have to leave her with after their deductions? She has to pay bus fare to work, so taking most of her wages seems really unfair!

I've suggested she ask if she can repay at £100 per month, does that seem reasonable?

Thanks

Whether she was eligible for furlough is between her employer and HMRC. It's nothing to do with her and is not her problem.

She will have agreed to stay at home and not work, and to receive (presumably) 80% of her pay. That was a contractual variation. As long as she did what she was supposed to do, she is contractually entitled to that money.

If her employer failed to check whether the scheme applied, and therefore are not able to reclaim that money from HMRC, that is not her problem. There are two legal interactions here, there is a contractual relationship between her and her employer, and there is an interaction between her employer and HMRC.

Furlough is NOT an employment law 'thing'. It is a scheme whereby employers can claim funding from HMRC to cover wages. The employment law aspect is purely contractual - there is an agreement between employer and employee to vary terms and conditions with the effect of reducing pay and staying at home.

She should not pay any of it back.

Thanks Flowery, I didn't think of it like that, I'll tell her. Thank you!

Flowery is the expert here but I would also say that this is between the employer and HMRC and shouldn’t involve your friend
Interestingly I understand that the first prosecutions for Furlough fraud are starting so the employer may be starting to panic a bit

Hopefully flowery is right and she won’t have to pay any of it back, but in case she does, I was in a similar situation about ten years ago. I had started a new job, was low paid, and in the process of setting up my payroll my employer fucked up and overpaid me by about £900 over three months. I didn’t notice because the first few pay slips are often all over the place in a new job as the tax, student loan etc is adjusted.

Anyway, I came to an arrangement with payroll to pay it back over six months.

It’s their fuck up so they need to be reasonable about the timescale, if it does turn out to be repayable at all.

My DH was in a similar situation last year...his work had been mistakenly paying him statutory sick pay in addition to his wages (he was on "light duties" due to an injury but not actually off work). As DH was working lots of overtime he never thought anything of the extra money.
Soon, he had to pay it back (about £1000) and worked for next to nothing for a couple of months until it was paid off...it sucked but had to be done I'm afraid...

As long as they're getting it paid back, a more reasonable payment plan could/should be put in place. Definitely worth asking for a different time scale...

They messed up, not your daughter's friend so they should help fix it...

Have they said why she's not eligible? Eligibility was pretty much guaranteed if you were paid through PAYE on 19th March, even on zero hours contracts. It sounds a bit dodgy to me.

@underneaththeash

Have they said why she's not eligible? Eligibility was pretty much guaranteed if you were paid through PAYE on 19th March, even on zero hours contracts. It sounds a bit dodgy to me.

Doesn’t matter- it’s for them to ensure a claim they are making isn’t fraudulent, and if it is, it’s not for the employee to pay for that.

@KeepSmiling89

As long as they're getting it paid back, a more reasonable payment plan could/should be put in place. Definitely worth asking for a different time scale...

They messed up, not your daughter's friend so they should help fix it...

She doesn’t owe them money. If she had a contractual agreement with them to stay at home and receive 80% of pay, they owe her the 80%. If they find they cannot claim it back from HMRC that doesn’t affect her contractual entitlement to the money.

OP’s friend definitely does not need to repay this money. She is entitled to receive her wages unless she has agreed not to be paid, which she hasn’t. If they start to make deductions then she should go to ACAS regarding unlawful deduction of salary.

It is the employers fault that they didn’t check whether they were eligible for payments from the government job retention scheme. Had they found out they were not eligible earlier then they would still need to continue paying her or make the decision to proceed with redundancy or termination if less than two years service.

No, but it may be an easier way to deal with it.

Unless of course she signed a furlough agreement which entitles her employer to recover funds. This is quite common IME.