Questions & Answers
Can my employer demand repayment of salary after acknowledging an increase?
Hello,
I currently work for an American company based out of the US, but my contract is through a legal entity in the UAE.
I received a salary increase last December. I had to sign a salary increase document. I have been getting paid that salary since. Now the company has a registered entity in the UAE.
While they were reviewing the financials to transfer our contracts from the current local entity to the new one, HR claims they made a mistake, stating that I have been overpaid. They are asking me to revert to my previous salary and pay back the extra money I received.
I have the signed contracts and the emails where they are admitting that error.
Note that the new salary has been submitted to the involuntary loss of job insurance, and I have also applied for a bank loan using the new salary, providing certificates from my current local employer with that salary to secure the loan.
Thanks!
Dear Questioner,
They have no right to ask you to change the contract or to demand a refund of the salary difference.
However, nothing prevents them from terminating your employment with the company.
So consider the best option for yourself.
Dear Questioner,
The salary increase you received and signed for in December is legally binding. Once an agreement has been made in writing, and you've been paid according to that agreement, it forms a binding contract between you and your employer.
The employer is now claiming that they made a mistake and are asking you to revert to the previous salary and pay back the "overpaid" amount.
However, since you have a signed document agreeing to the salary increase, this request might not hold up legally.
Hello,
As per your query, please note that you have to share the documents in order to provide you with an accurate opinion on the same.
If you signed some documents or contracts, then if there are certain clauses, you only have to comply with the same; otherwise, you are not liable. Please email us the documents [--------] or call [-------].
Thank you for reaching out and sharing the details of your situation!
Based on what you've described, it seems that your company has acknowledged the salary increase, and you've signed documents to that effect.
Additionally, the fact that your salary was used for official purposes, such as your job loss insurance and a bank loan, further strengthens your position.
Generally, once a salary increase is formalized and agreed upon by both parties, it's not simple for the company to reverse it unless there is clear mutual consent or a legal basis to do so.
Their mistake in payroll may not necessarily translate into a legal obligation for you to repay the amount, especially if you acted in good faith.
It would be important to carefully review your employment contract, the salary increase document, and the correspondence admitting their error to fully assess the situation. I recommend we discuss this in more detail to explore the best way forward to protect your rights.
Feel free to reach out to me directly via WhatsApp or phone at [--------] so we can arrange a consultation and discuss the next steps.
Best regards,
Suhail Rana
Dear Questioner,
If the salary increase was signed by both parties, the company cannot ask you to refund the excess salary retroactively.
If anything else is required, don’t hesitate to contact us via email at [--------] or call our offices in Dubai at [--------] or Sharjah at [--------].
Jasim Al Haddad Law Firm
Legal Counsel and Consultations
Dear Questioner,
You likely do not need to repay any alleged overpayment, given that you have a signed contract reflecting your new salary and HR's acknowledgment of their error.
However, consulting with a legal professional is advisable for tailored guidance specific to your situation.
