Is this odd? Previous employment say I owe them money

[Bettyboop10]

Hello everyone,

My mind has been going round the twist and I don't know if this sounds fishy or if it's just something that I am creating in my head. Here it goes.

I applied to a permanent post for a job. Unfortunately, I did not get the permanent post but they offered me a fixed term contract (duration 6 months). I took the job as it would offer me great experience and I was desperate to leave my previous toxic work place.

My fixed term post terminated on the agreed termination date on the contract. My manager offered me to attend an exit interview, stating that 'They do not offer this for temporary staff (but) want to gather my view anyway'. So I attended and gave praise to the team, with minimal changes that they could make but made it short and overall positive. I assumed that my manager may extend my contact or point me to a job advert that may be coming up within the team. But she didn't. So I let it be and applied for another job, which I got and have recently just started.

I am still a part of my previous employments team's work messages social account. Just 3 weeks since my departure from the team, I noticed that they posted a permanent job advert of the role that I was doing. This stung a bit. But I thought, well let bygones be bygones and at least I have another job coming up.

Just before I left my previous employment, I contacted my PAYROLL department to provide me with my P45 (as I forgot to download this before I handed back in my work laptop and could not get back into my payslip account). The payroll department informed me that as I am due to leave, I should just wait till my close terminate date ends and then my employee has to fill out a leavers form (?) and that's when they give me my p45. I thought no biggie.

Now, it has been two weeks since I have left my previous employment. I then contacted my payroll department and asked them that I need my P45 due to my new job asking for this. The payroll department notified me that because my manager filled in my leavers form late, I have been overpaid in August and hence the money owed will be taken from my September's pay check ( in my job) and once this is paid back, then they can generate a p45.

I notified the Payroll team that this cannot be and I do not believe I have been overpaid in August. My contract ended on the 26th of August and I notified the payroll department, on the 21st of August that I am due to leave my job and need my P45.

The payroll team told me that as my contact was permanent, there was no end by date and hence, due to my manager signing off my leavers form late, I have been overpaid in August and hence need to pay this back.

I replied that my contract is not permanent and I provided the payroll department my previous employment contract, which clearly states that my contact is fixed term and the end date is the 26th of August. Since then, I have just had radio silence.

What the hell is going on? I automatically assumed that something dodgy was going on. But please let me know if I need to pay back the overpayment- which I do not think this is the case.

What if the employee has left the company?

The employer has the right to reclaim overpaid wages even if the employee has left the company. However, if the employee has already left, it can be more difficult for employers to recover any overpayments. Action should be taken quickly in case the final salary payment has not yet been made. If the final payment has been made, an informal request seeking repayment can be made to the former employee. If they refuse, court action can be considered - but success will depend on the financial circumstances of the former employee, and legal fees may cost more than the sum in question.
Where an overpayment is only discovered after an employee has left, and they refuse to make voluntary repayment, the employer should consider the legal options. These may include:

• gathering together at an early stage all available information about the former employee’s current means and employment status, to determine whether repayment is likely to be possible (ie can the former employee actually repay any of the overpaid wages)

https://www.rocketlawyer.com/gb/en/employment/manage-employees/legal-guide/overpayment-of-wages#:~:text=The%20employer%20has%20the%20right%20to%20reclaim%20overpaid%20wages%20even,has%20not%20yet%20been%20made.

It's not odd, just a load of incompetence.

You just need to actually look at your wage slip and work it out for yourself what period of time you've actually been paid for in the last month.

For August there were 23 working days, so divide your usual monthly gross amount by that, times it by the number of days you worked in August and see if it matches the figure on your August pay slip.

If they've paid more, they've gone beyond your leaving date, you owe them money. If they haven't you don't. Just compare your usual monthly amount with the gross amount.

Your new employment won't really need your P45, you can do a new starter form instead. The P45 helps you get on the right tax bracket from the start but you really can start without it.

How can they take it from September's pay if you don't work there any more?

I'm not too sure really. They said they will take it out from my next paycheck...Can they do this?

If you’ve been overpaid I believe they can have you pay it back. We’re you paid the correct amount in August? Are you sure you were not paid for any hours/ days not worked? If the amount paid was definitely the amount owed then I don’t see how they can make you pay anything back.

My old workplace used to send payroll files to the bank in the middle of the month. So if your old company do this, and your manager filled in & returned a leaver's form after that date, then the cut off date may have passed and you may have been paid up to the end of August. Not your fault, but yes you may well have been overpaid by a few days through no fault of your own. Withholding your P45 is about the only leverage they have over you now, as you have left.

Were you paid less in August than previous months?

Yes:

In July, I got paid £1613.22

In August I got paid £1584.8

Thanks. I'm not sure if I am calculating this correctly but the figures are just not making sense.

It is not uncommon for payroll to run some time before your payday.
It sounds more than likely that it wasn't adjusted in time, but now you have added that your pay was quite a lot less, it seems that they might well have. However, as a pp said, work it out for yourself in terms of your 'daily rate' and the number of days you work, but of course it depends if your "work month" is the same as your "calendar month".
The most sensible thing is to ask them to clarify for you how the calculation has been made in your case .

If they continue to say you've been overpaid ask for their full calculation. Not just some random number, how the correct August pay has been actually worked out.

Then you can decide if to repay or argue their calculation.

Did you take all of your holiday allowance whilst there?

Why do ask if they can take it from September? You aren't there. There is no September pay from them to take it from.

What do they mean your next paycheck? Why would there be a 'next' one? You don't work for them any more. Your next pay will be from your new employer. They cannot approach your new employer and demand that some of your salary is paid to them instead.

By the way, I can't help wondering whether there has been an administrative foul-up somwhere in the payroll department, in that you were given a fixed-term contract but they had you down as permanent by mistake. You should not be penalised for their error. If they believe they have overpaid you, then they need to send you an exact breakdown of all their calculations, and how they have arrived at the figure you supposedly owe them. Until they do that, they can't demand repayment.

Based on July gross*12/365 your daily rate seems to be £53.04. If you were paid for 26 days in August then I think the gross due would be approx £1380.

On that basis you were overpaid by approx £200 but of course there may be something added if you were owed holiday.

How much does the employer say you owe and have they 'shown their workings' for the figure?

As others say the absence of a P45 is not fatal but it may leave you on a 'Month 1' emergency tax code until the actual cumulative total can be applied. As you're not new to work that will probably not make any practical difference.

My employer failed to process my P45 when I started which meant the prior employment total on my 22/23 P60 was absent. But it makes no practical difference, my tax code is BR as I have a pension from my first career which uses all my 'free pay'.

If I need to complete a tax return I'll just show the P45.

Well then you were almost certainly overpaid, regardless of what your contract states, it sounds like somebody forgot to do something. Look at the gross figures and I am sure you can work out how much of an overpayment has been made.

In that case it sounds like yes you were overpaid, and yes you will need to pay it back.

You should only pay back the net amount.

@Bettyboop10 its not unusual for managers to think payroll and HR are psychic. Overpayments like this are very common.

I assume the figures you quoted are net salary rather than gross. I also assume you may be owed holiday as you were clear this was a FTE. Plus it is not clear your pay day nor if your employer uses a 365, 260, 261 some other method of calculating pay.

Email your former employer and confirm last day of employment. Ask them to set out exactly what has been paid and how they propose to rectify this. Particularly how they are going to rectify your NI and tax as this needs to be done before they can issue a P45.

What they need to do is correct payroll for August so that when they run September payroll the system automatically recalculates tax and NI. If there is an overpayment then they will probably ask you to repay the net figure. This does mean your tax and NI on your P45 may be incorrect. You may find you need to contact HMRC for a refund but may have to wait until then end of the tax year.