I was over paid by $10,000 over a 4 month period last year. I did notice the difference and did not report it for a year. I am reporting it now. What kind of consequences do I face aside from paying back a large sum? My employer has not caught on to the mistake. I am voluntarily reporting it.
I am not a lawyer, but I can't imagine you would be held responsible for anything other than repayment of the amount not owed to you.
What happens is entirely dependent on your company. I suppose they could tell you to keep it, but that seems unlikely. Worst-case scenario is they will deduct the entire amount from your paycheck until repaid.
More likely, since you are the one bringing it to their attention, they will arrange repayment on a schedule that works in your favor.
In any event, I would not worry about any additional liability on your part.
What you describe is considered unjust enrichment in the law. You benefited from an error and it should be corrected and repaid.
However, most states have fairly strict laws about unjust enrichment when it relates to employee wages, including time limits in which an employer can legally obtain the funds back from you. These time limits can vary wildly, from 90 days to 5 years, so you'd have to check what it is where you live. In some states, you have already passed the time limit that the employer has to catch the mistake and you are no longer obligated to repay it.
If you are still obligated to repay it, they will most likely just deduct the amounts from future payments, either in a lump sum or in divided amounts over time. If you no longer work there, you will need to set up a payment plan with them to repay the full amount back.
There are no other consequences an employer could possibly enforce upon you for this situation, unless you actively refused to pay the amount back (at which point, they could terminate you for cause, which prevents you from collecting unemployment benefits). It is entirely the employer's responsibility to catch and correct their overpayment mistakes, not yours.
Technically speaking, you are not required to ever report this. If you really, really wanted to, you could just ignore it until any statute of limitations expire on the payments. That isn't an ethical thing to do, but there isn't anything the employer can legally do if you choose that path.
They will probably just thank you and request you repay the money.
I highly doubt they would ask too many questions since there really is no point to it. If they ask why you didn't report it sooner you could say your accountant noticed it, something very simple like that. In any case for whatever reason you are reporting it now, there really is no reason to cause any kind of issue since it will not be helpful to anybody. Their main worry right now will be to see how many people got overpaid and just exactly how incompetent is their payroll officers.
I advise you to seek a lawyer on this subject. Yes, it's ethical to report this, but you may get yourself into legal trouble that you cannot get out of as easily. After all you admitted receiving money you did not earn. Nobody wants to seem "incompetent" especially if their job is on the line. So by bringing this up to payroll, the person may cover their tracks and go the route of making sure it looks good for them. 10k is a lot of money to be overlooked, so consider that aspect of it.
My thought is a lawyer will help you in making sure you "do the right thing" and at the same time be protected of any sort of lawsuit or paycheck deduction that may be illegal in your area/country. Also your company may get lawyers involve and in turn ask you turn over various bank statements and so forth. So it's important that you know your rights and what sort of legal protections you have.