Question: Hi, Alan. I signed an employment offer letter with a defense contractor last October to work in Afghanistan. The offer letter stated (a) an “overseas” rate of $81.30 per hour, (b) a “stateside” rate lower than that, and (c) an annual rate of pay.
For twelve months, many employees and I on the same contract were paid the “overseas” rate, and our paystubs reflected this hourly rate.
Now the company is claiming that we were all overpaid, because the total of the hourly payments is larger than the hourly payments we received. The company is trying to recoup the difference by holding back our last paychecks.
Can they do this legally?
Answer: Hi, Rick. Thanks for writing in.
An offer letter, once you have accepted it, is a contract. Like every contract, the parties to the contract must honor its terms.
Sometimes, contracts are written clearly; other times, contracts are confusing, inconsistent, even incoherent. Sometimes, it is very difficult to determine what, exactly the parties to a contract agreed to. There is an art to drafting a good clear, definitive contract, and it’s an art that not many lawyers have mastered.
Your contract may say that there are three payment rates, and you will get paid the lowest amount possible. Your contract may say that there are three payment rates, and if you go to Afghanistan, you will get paid the highest rate. Or it could say many other things, some of which may not be clear. Your contract needs to be read by an attorney, who must carefully read every single word, and every punctuation mark, without exception.
As to recoupment of overpayment, the law provides that employers can hold back monies if they are reasonably certain that they have made overpayments. However, if an employer does do that, and is wrong, in many states they would be liable to affected employees for (a) double or triple the amount, (b) interest, and (c) legal fees.
Depending on the amount of the “recoupment,” it may be wise to have an experienced contract attorney read your contract, and provide you with his or her view of the employer’s obligations to you.
If you need you might consider obtaining one of our best selling Model Letters entitled “Demand for Unpaid Employment Compensation” [click here].
Thanks for writing in. Please let us know what happened, so we can share it with others. As you may have noticed, there’s “lots of sharing” of info and insight on this blog!
Best, Al Sklover[newjob]
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