Overpayments to the worker

During the development of the labor relationship, different situations may arise that reduce the amount of the salary that the employee should have received, for example, due to embargos for debts or alimony.

However, situations may arise in the opposite direction, in which the employee will receive a higher amount due to the payment of a bonus or liberality, or even due to an administrative error, as a result of which he/she is paid a higher amount than the amount that normally corresponds to him/her.

In case of an administrative error, the procedure to follow can be found in the second paragraph of article 173 of the Labor Code:

The debts that the worker contracts with the employer for advances or for payments made in excess, will be amortized during the term of the contract in a minimum of four payment periods and will not accrue interest. It is understood that upon termination of the contract the Employer may make the final liquidation as appropriate.

Three rules can be extracted from the aforementioned article:

a) It is only possible to deduct from the employee's salary amounts for salary advances or overpayments.

b) The amount owed cannot be deducted in a single transaction.

c) The debt does not accrue interest.

It is also possible that the amount owed by the employee is very high in proportion to his salary, so that even if it is made in 4 installments, this payment would place him in an economically compromised situation for the care of his basic needs, both personal and family.

In this regard, by resolution 2020-15260 of 09:15 hours of August 14, 2020, the Constitutional Chamber, introduces another series of requirements before proceeding with the deductions:

“In the matter under study, the Chamber observes that there are two issues that must be analyzed: 1) the possibility for the Administration to make deductions for amounts overpaid; and 2) the necessary communication that must exist to the worker, on the amounts owed and the manner in which it will proceed with the deduction. (...) III.- III. On the other hand, with regard to the second issue raised in the amparo, that is, the necessary communication that must be made to the employee regarding the amounts owed and the manner in which they will be reduced, it should be recalled that although the Chamber has accepted that the Administration may recover by means of a salary reduction, the amounts paid in excess for which it is not required to follow the ordinary procedure established by the General Law of the Public Administration (...), it is also true that it has also clarified that it is not necessary to follow the ordinary procedure established by the General Law of the Public Administration (...). ) the truth is that it has also clarified that such reductions are acceptable as long as the worker is previously informed -at least- of the amounts owed, the number of periods in which the reimbursement is applicable, the monthly amount of the deduction and the amount to be deducted monthly that will allow him to receive a sufficient amount of salary to satisfy his basic needs. (...) In the specific case, for the Chamber it has not been demonstrated, with the evidentiary elements that were added to the file, that the appellant had been previously notified about her particular situation, the amount of money that was overdrawn for disability and the manner in which it would be deducted, (...). Under this perspective, it is considered then, that there has been an infringement of the right to salary due to the lack of prior communication to the civil servant about the amount owed and the way in which the State was going to proceed to reimburse her (...)”. (Resolution of the Constitutional Chamber 2020-15260 of 09:15 hours of August 14, 2020).

Thus, 2 more requirements must be added to the aforementioned requirements:

d) Communicate in advance to the worker the existence of the overpayment before applying any deduction.

e) Establish a payment plan that allows the worker to meet his basic needs and respecting the minimum wage, even if this implies making deductions in more than 4 installments.

Therefore, before proceeding with any deduction from the employee's salary, it is recommended that the employee be clearly informed of an account statement that establishes the salaries paid in excess as opposed to those that he/she should have received and the difference that this generated. Then, establish by mutual agreement a payment plan that allows the employee to meet his basic needs, even if this implies making the payment in more than 4 installments.

At Bufete Godínez y Asociados, we specialize in counseling and advising employers in labor and employment law. If you need any additional information, do not hesitate to contact us by clicking here.


About the Autor

Jairo José  Cerdas

Jairo José Cerdas

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