Friend got overpaid but doesn’t report it - is it my obligation to report it?

Question

A friend/coworker of mine recently left the company after his internship ended. He later told me that got overpaid with his last salary but also said that I shouldn’t tell anyone so he didn’t have to pay it back.

This is a difficult situation for me, on the one hand I feel like he absolutely needs to tell the company and give the money back if they insist (most likely) especially as he definitely knows he’s been paid too much. On the other hand he’s asked me not to tell anyone and I’m good friends with him so I wouldn’t want to be the bad guy and tell someone behind their back. Even if I did it anonymously he’d know I was behind it.

I feel like I’m personally lying to my employer and am kinda mad at my friend for getting me involved in this. He isn’t in need of money so I understand him even less, it’s about 500€ which isn’t much for him but for me that’s a significant amount of money (even if it’s probably nothing for the company).

What do I do now? Both ways seem wrong to me but our company explicitly states to "immediately inform them of any wrong payments," which makes me feel even worse. I’ve tried to tell my friend that I would speak up, and if he doesn’t, he’ll probably have to pay it back eventually anyway, and if they find out he knew, it’ll probably turn out pretty bad, but it’s no big deal for him. He treats this situation as if someone had accidentally repaid him 10€ instead of 9€.

Any suggestions? Am I obligated to do something about this/tell my employer etc.? Do I have to fear any consequences if I don’t do anything?

Answer 1

No

Unless as bharal pointed out, there is evidence that you discussed this over company email etc.

1. How do you know your friend is right? He could be incorrect, it could be holiday pay owed to him etc. It might be that he has been paid the correct amount.
2. Does your company also have rules about discussing salary? If so, it might be prudent not to mention that you have been talking about wages.
3. It's the company's mistake; it is between them and your friend, it is not your place to be involved - unless you are bigger friends with the company owners. He will not be in trouble for being overpaid: he can always claim he didn't realise.

As a friend, you can suggest that the ethical thing to do for him would be to ask the employer if they made a mistake as it was more than he thought. I would advise him to keep that money to hand so it can be paid back if required.

From your perspective I don't think you can get into trouble. You can always claim if it somehow becomes known that you knew, that you had no way of knowing whether he had been overpaid or not and it was not your place to say, although you urged him to contact the business to resolve the issue.

Answer 2

It's up to him whether he informs or not.

You should tell him that it's highly likely that the company will find the error in the payment and will want that money returned.

If he won't return it when requested by the company, then he'll have to face the consequences.

Answer 3

Things to consider: You say it’s a friend. You don’t actually know if he was overpaid, he only thinks he was. If someone in the company made a mistake, you are stepping on their feet big time. Fixing the mistake if there was one takes time and money.

So you are ratting on a friend, your employer will know that you rat on friends, you will be accusing some employee of making mistakes, and all that is for very little or no benefit to the company.

No good will come from it for you.

Not much good will come from it for the company either, at least in the UK. Let's assume for arguments sake that there was indeed an overpayment. This website http://www.shoosmiths.co.uk/client-resources/legal-updates/Overpayment-of-wages-when-and-how-can-employers-recover-3973.aspx gives a lot of information about what to do in case that an overpayment is found. Handling it the wrong way can get the company into serious trouble. And there is actually no mention whatsoever that the employee would have any responsibility to inform the company.

For an amount of €500, recovering the money will likely cost a lot more than €500. And it should be obvious that the company cannot just say "we overpaid, pay us back". We know for a fact that the company has made a €500 mistake at some point. There is no reason to assume, without good evidence, that the mistake was made on the payment, and not when they checked the payment. We know that their payroll can't get their numbers right, so the employee can demand that their numbers be checked independently before any money is paid back.

PS. Here’s what happened with my first job after school: I worked for three months. The last pay check was huge. It turned out it wasn’t an overpayment, but I hadn’t taken any days off, so the company paid me six days holidays plus 50% because it was overtime. Might have happened to your friend, only he didn’t figure this out.

Can you imagine what happens to your reputation in this situation?

PS. My last company overpaid me as well, that is they didn't deduct the right amount of taxes from me. More money in my pocket, which HMRC then politely asked me to pay to them :-(

Answer 4

Did he tell you via email to your company account or when you were sitting together.

ie is there any readily accessible evidence he told you? If not then how will the company find out?

Also, I think you've misconstrued the "immediately inform them of any wrong payments" statement. That is really there for your friend, ie "if we overpay you then you should immediately inform us". While the company will obviously want to know about this, it's not the intention of the statement you refer.

You need to value your friendship against this company. I think it's highly likely they'll request the money back soon enough, and it speaks volumes about your friends ethics - store this away.

But your job isn't at stake, and you don't need the drama this will cause with your friend, and the company isn't going to reward you for the drama that would unfold. You must do what you want to do, but consider the repercussions.

Answer 5

This is a matter between your friend and the company. It is confidential information.

You should not stick your nose into this unless you want to get into trouble with the both parties later on.

Answer 6

No, because he's wrong

You have an excitable friend who likes to brag. Such people are not renowned for their accounting skills. Who is, however, is the company's HR/payroll department.

What's almost certainly the case is that HR paid him correctly and he does not understand why, because he does not do payroll for a living, and so he has created an entertaining myth about them messing up.

Fine, let him have his myth.

Answer 7

This answer would be a better fit for IPS than workplace, but here I go:

Ease your conscience by telling your buddy that you think stealing (also known as taking or keeping what is not yours) is wrong, no matter how easy it is. Tell him that he put you in a tough spot because he confided in you, but that you will keep the secret only this once, because he asked you to.

You are not legally required to report this.

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P.S:

he treats this situation as if someone had accidentally repaid him 10€ instead of 9€.

So if he spots the error he corrects it and hands them back the difference? No problem then.

Answer 8

Obviously, both sides of this argument are covered. What my answer has to add to those already here is a methodology at arriving yourself whether you should tell or not rather than a blanket "yes" or "no".

What he's doing is stealing. There's no question about that. He's keeping money that isn't owed to him. To put it in perspective, I'll offer a couple of scenarios.

• If your boss was talking to you in your office/cubicle and his wallet fell out of his pocket, would you keep it? If your friend kept it, would you let the company know what happened to it?
• Suppose your company sells laptops and your friend tells you he found one behind a crate in the warehouse. Should he keep it?
• If you discovered your friend was embezzling from the company, would you feel obligated to let them know?

Make no mistake, your friend is stealing from the company. It became theft the moment he decided to keep it after realizing he was overpaid.

What I would do

If it were me, I would let HR know and I would do it anonymously. The easiest way to do that is to find an anonymous email service (or create a new gmail account) and email to HR something simply like "Bobby Jones was overpaid in his last paycheck, you should check it out." and leave it at that. They'll look into it because they'd be stupid not to and since there's no name attached to it, you don't have to worry about them saying "violentelephant said you were overpaid".

The bottom line is that it's a question of whether your own ethos will allow you to knowingly let someone steal from the company just to avoid getting involved. As others have said, he will be caught, it's just a matter of when.

Answer 9

An interesting aspect of this question is, are you asking whether you might get in trouble, or which action is the most moral?

In terms of getting in trouble, there is no 100% way to be sure, but probably not.

What is the most moral? One thing we don't like to imagine is true, but happens all the time, is that you have found yourself in a situation where there is no perfectly moral choice. Either you betray a friend, or betray your employer.

If you report it anonymously, as has been suggested, you are actually committing the least moral of the choices, because it involves betraying your friend and creating a new lie (assuming you do not tell your friend it was you).

What does one do when faced with two immoral choices? One way to go about it is, which one causes the most pain? In that case, it seems as if the most pain is reporting your friend because it hurts him and hurts your friendship. Another way to go is with Kant's theory that truth is always best, in which case you should report him and admit it to him. But, Kant's theory means you would also have to report a hiding Jew to a Nazi search party, so it's pretty harsh.

But let's put all that aside for a moment, because you should ask if you are being honest with yourself. You said "it’s about 500€ which isn’t much for him but for me that’s a significant amount of money" and "he treats this situation as if someone had accidentally repaid him 10€ instead of 9€." Morally, it's the same whether it was 1 or 500, and to him and the company it is nearly the same whether it is 1 or 500. Are you sure you are not just angry that a person who has so much more money money than you should just have this land in his lap? Obviously it is very unfair, but would you still be asking this question if it had happened to someone much more poor than you, who really needed it? I don't know the answer, but it is one you should be asking yourself.

Answer 10

As a person with certain experience with payroll, I would like to add my 2 pence.

First of all, I think this is more of a pickle for you than for your friend because most companies have some sort of accounting controls in place that will sooner or later reveal this type of event, so in all likelyhood, he will hear from the company and then he may get some silly notions you actually told them about it even though you did not, which may sour your relationship.

As such, my professional advice would be to tell your friend exactly that - if he really was overpaid, he should report that himself because they will eventually find out because the money will be missing from somewhere or something will not be adding up. Depending on the source of the overpayment, this may lead to all sorts of entanglement including fraud investigation (an overpayment can, in fact, be the employee's fault).

Having said that, I feel I should repeat what was mentioned in the other answers already. While payroll is not a difficult craft, in my experience most people (even with sciences or IT backgrounds where one would expect them to have way with numbers) do not have the remotest qualifications to make statements like "I have been over-/underpaid". And no, I don't know why that is but most people just can't do that even if it is as simple as a proportionality calculation.

As such, the perceived overpayment can have many explanations - outstanding holiday pay, outstanding flextime pay, misunderstanding of the concept of a working day (may be treacherous particularly if public holidays are involved), tax relief through payroll, anything...

Furthermore, if an employee reported that another fellow employee or ex-employee was overpaid without being their boss, most payroll and HR people will just thank you for your concern, get you out of their office and forget about this because another employee's salary/payments is not your damn business.

Answer 11

It could be many things. Unused holidays, goodbye bonus or other bonus, tax corrections, over-time... I am pretty sure there are people responsible at the company to keep track of things like that. To avoid money leaking out illegally from the company (economic crime) - economic revision or what it is called. I think it is unreasonable to demand that every employee should know exactly all the rules. Everyone can't be an economist and a lawyer.

Your friend may be obliged to pay back if they realize a mistake though so tell your friend to not spend it all in case it is a mistake. Would be embarrasing if he had bought say for example... beer for everything and can't pay back if they realize it was a mistake. :)

Answer 12

Please report the situation to the human resources.

Unfortunately you are now in a position where you have information that you never requested and you do not know what can arise for having such information.

If you keep this information from the knowledge of your company you are in fact acting like an accomplice (I am not suggesting in any way that your friend has committed a crime). This probably isn't going to manifest in any shape but I would say it's much better to be in a position where you are not afraid of anything or at least in a position which can have the least harm for you, since your friend might no longer trust you.

However you need to be careful on how you convey this message to hr. Don't assume what your friend said it's true. The company might have decided to award some kind of bonus to your friend. Or your friend might not have took into account several payment items such as vacation days, extra hours, contract clauses that might award some money in some scenarios, ...

For this reason instead of conveying that the company has paid too much instead you should convey that your friend told you that he might have been paid too much. Something along this lines:

Greetings, Mr/s (hr personnel name goes here).

My friend, [your friend Name], recently left the company. He has confided me that he might have received more money on his last payment. I did not want to be in a situation where this information could work against me and hence I am providing it you. I am sure you will be able take whichever procedures you see fit.

I am really sorry for bothering you about this subject.

Best regards, [your name]

Once you do this you should just forget about the subject unless prompted. Move on to your work, that's what matters.