Have you mistakenly overpaid your employee or a contractor who refuses to return that money?
- Did you sponsor higher education for your employee with a commitment to work with you for a few years, but he resigned right after completing the degree?
- Did they sign a contract stating they would pay back the training fees if they didn’t work for a specific duration?
- Other circumstances where an employee can owe money to his employer include – overpaid salary, excessive travel expenses, misuse of company credit card, unreturned company equipment like a laptop or excessive reimbursement claimed.
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A collection agency can work with your employee professionally and legally to ensure that you get your money back. Their recovery efforts will include sending demand notices and calls from a professional debt collector. If the amount is substantial or litigious, they will forward it to an experienced attorney.
Often the employee becomes unreachable or unresponsive to the employer’s contacts. They often change their address. A standard practice among all good collection agencies is to use the Skip Tracing service to find out the latest whereabouts of the debtor or the offender. A collection agency is not a replacement for police; they only act to recover the debt legally. They can report the debt to credit bureaus like Transunion and Equifax if the creditor/employer instructs them. It is crucial to maintain proper documentation to avoid getting sued by your ex-employee in cases like these. An employee debt collection agency will follow all federal and state debt collection laws to recover all unfair reimbursements and money owed.
Recommendations:
Document the Overpayment: Create a clear record of the overpayment, including details like the amount, the reason for the overpayment, and any relevant policies that were not adhered to.
Listen to the Employee’s Perspective: Allow the employee to share their side of the story. There might be information or circumstances you are not aware of, and it’s important to consider all sides before taking action.
Final Internal Communication: Before involving a collection agency, it is often best practice to send a final communication to the employee outlining the outstanding overpayment and your intent to involve a collection agency if the matter is not resolved.
Provide Documentation to the Collection Agency: Supply the collection agency with all relevant documentation regarding the overpayment. This should include any communication you’ve had with the employee regarding the issue.