If you’re classed as a small employer, you can reclaim 100% plus 3% in small employers’ relief. The typical situation is where an employee quits his job, but the employer feels the employee still owes certain obligations. At first glance, it seems practical that an employer should be allowed to simply deduct the debt from the employee’s salary. Otherwise, you can reclaim 92%. On the flip side, it is much more difficult for a business to find cause for a legal case against an employee. An adviser will help you work out which is the best option for you, and what to do next. The debt could have arisen in different ways – such as a loan, damage to company property, theft, fraud, or even overpayment of salary. Spratt Endicott operates a full-service FCA-approved debt recovery department, which specialises in the recovery of commercial, consumer and international debt. In general, there are two ways you can deduct theft losses of inventory. There have been some colourful examples of employers trying to deduct wages, so it might – ahem – pay to know more about your employment rights What a 'breach of contract' is. For employees, that risk comes in the form of the “use it or lose it” rules. Ideally though, it wouldn’t get to this stage and should really only be undertaken to claim substantial overpayments. Posted on May 4, 2017. The employer must follow a fair procedure and give the employee a reasonable opportunity to show … Well, much of it depends on the reason/cause as to why the money is owed. Statutory Maternity Leave. At one time, our New Jersey courts permitted employers to sue their employees to recover monies it the employer had to pay to third parties for damages caused by the employee’s negligence. This is especially useful if they owe a large amount or you did not realise you were making overpayments for a long time. How can employers recover debt from former employees. 10 Dec at . The standard of proof is lower in the civil courts than it is in the criminal courts, so it may be easier for the business to prove their case against you. For instance, if an employee has been overpaid in the last week or two it wouldn’t be unreasonable to require the whole amount to be repaid immediately. Although most UK employers can choose whether to offer flu jabs employers should offer them at the start of flu season to all health and social care staff whose roles involve direct care work to comply with duties under the Health and Safety at Work Act (1974). If there is a return of property clause but either the employee has already been paid all outstanding wages or the clause does not cover deductions from the employee's wages, the employer would have to make a claim in the civil courts for breach of contract and/or trespass to goods. If the employer is ordered to repay the employee, then the employer must pay within 15 days of the Department of Labor’s determination. There are preliminary alternatives that can avoid court, however the process behind these often isn’t straightforward. “Loss or damage” – which the employee has consented to and includes the value of work-related loss, damage, or waste which an employee causes either deliberately or negligently to the employer’s property – such as vehicles, machines, equipment, materials, etc. Interviewing witnesses can be the toughest part of an investigation. Any information held about you on the database must have been proven, relevant and relate to you. A business might take civil action to get compensation from you instead of criminal action, or they might do this as well as bringing criminal charges against you. The claimants could only sue to recover damages for financial loss if they had a right of action in breach of contract or in tort. After all, once an employee has gone, disciplinary action is no longer an option so what can happen if they ignore their entreaties? Company cars, laptops, uniforms; damage to company property can hinder both employees and employers. Unfortunately though, the returns from this can be so minimal that many businesses are not prepared to follow this route. Once the fraud has been discovered companies must act quickly to investigate the issue and to protect the company's position but without alerting the suspected wrongdoers. This is an option if the former employee has found alternative employment. To search for details of your nearest CAB, including those that can give advice by email, click on nearest CAB. If you’re classed as a small employer, you can recover 100% plus 3% in small employers’ relief. Not what our client wanted to hear but it did lighten our day somewhat! Martin Hughes, Head of Commercial Recoveries, Spratt Endicott, discusses what happens when former employees owe the company money – and shares the options available. 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