Wage Overpayments (7/10)

We recently overpaid an employee by $200.  Can we deduct the overpayment from his next paycheck?

Yes, as long as you comply with applicable state provisions regarding overpayments and federal and state restrictions on deductions.      The federal Fair Labor Standards Act (FLSA) does not specify what an employer should do if it makes an overpayment.  Several states, however, have specific guidelines that address how an employer can recover wage overpayments.  For example, under Illinois law, an employer may deduct the entire overpayment on the first payday after the overpayment occurred if the employee aggress that an overpayment was made.  However, if it does not discover the error until after that date, the employer may make deductions only after entering into a written repayment schedule agreement.        Other states are less restrictive.  Indiana allows employers to deduct the overpayment from wages after two weeks notice.  And Maine permits employers that have overpaid to withhold up to 10 percent of any subsequent pay without the employee’s written permission.      If your state does not regulate overpayments, you still must comply with federal and state restrictions on wage deductions.  Under the FLSA, deductions from pay are prohibited if they would reduce the employee’s pay below the required minimum wage, and they may not affect the employee’s overtime pay.  In addition, virtually all states limit deductions to those that are required by state law, court order, or those which are authorized in writing by the employee.  Therefore, you should consult state law to determine any applicable requirements on overpayments and deductions.

Disclosing Status of Employee with Medical Problem (7/10)

We have an upper-level employee who has been diagnosed with a very serious illness.  She is still able to come into the office and will continue to do so as long as possible.  She sincerely wants her condition known to all so there will be no misinformation or speculation about her condition.  She also has indicated that she would like the comfort and support of her friends and colleagues here.  However, we in management are aware of the potential privacy concerns under the ADA, FMLA, and HIPPA and so are wary of making a public announcement.  How should we proceed with this issue?

You are correct to be concerned about potential privacy issues related to your employee’s medical condition.  As it sounds as if you are aware, several laws protect her medical privacy, including the Americans with Disabilities Act (ADA), the Family and Medical Leave Act (FMLA), and the Health Insurance Portability and Accountability Act (HIPAA).  However, these laws may not apply as long as the employee herself is the one providing information about her medical condition.      The ADA protects health information by requiring that all information obtained from employee medical examinations and inquiries be kept apart from general personnel files and be kept in separate, confidential medical records.  The FMLA has similar confidentiality requirements.  Thus, any medical information that your firm gathers as a result of the employee’s need for an ADA accommodation, for example, or need for FMLA leave, must be kept confidential.  Accordingly, you would not be able to provide information from these files to other employees, for example, to alert them to the employee’s medical condition.  However, these two laws do not prohibit the employee from voluntarily providing any medical information that she wishes to disclose to coworkers.        Similarly, HIPAA prohibits employers that are covered entities and that receive “protected health information” (PHI) from using or disclosing that PHI without the consent or authorization of the person to whom it pertains, except as permitted or required by law.  “Protected health information” includes all medical records and other individually identifiable health information held or disclosed by a covered entity in any form, whether communicated electronically, on paper, or orally.  So, as with the ADA and FMLA, HIPAA does not prohibit the employee from voluntarily providing any medical information to her coworkers.      Because of these potential privacy concerns, though, your best approach is to allow the employee to take the lead on disclosing information on her medical condition directly to her coworkers, without you or other members of management being the ones to provide any details about her condition.  Of course, the firm can express publicly its support for the employee once she has disclosed her condition without referencing any specific medical information.  And, as an additional safeguard, you may want to have your attorneys review any statements to ensure you are not disclosing information inappropriately.