Hi all, so I recently discovered that though I am salary I wasn't paid approximately 1,300 last year. How should I go about handling this?

Here's what we know:

  • You're a salaried employee, which in the US just means you're exempt from overtime
  • You took some unpaid leave at some point during the year, resulting in your pay being "docked"
  • At the end of the year you discover that your gross pay was $1,300 less than your agreed upon salary
  • You feel confident that you did not take enough unpaid leave to warrant $1,300 in docked pay

Let me give you some advice from the get go, to clear this up you're going to need to write somebody a letter or have a face to face meeting. Do not use the work "docked" to describe unpaid leave. A salary is based on an agreed work schedule: typically a 40 hour work week, plus X sick days, plus X vacation days, plus paid holidays. If you don't come to work one on a work day and you don't have any available sick or vacation days, then you don't get paid for that day. Even if you're salary. Salary employees are exempt from overtime, they're not exempt from not being paid for time they didn't work. "Unpaid leave" is more accurate term, and one that's going to make it sound like you know what you're talking about.

This creates an issue. You need to figure out how much your should have been paid, accounting for any time that you shouldn't have been paid. So if you made $1,300 less than your salary, but you had $300 in unpaid leave, then you're owed $1,000. You are responsible for figuring this out.

A couple possible scenarios could have (wrongfully) resulted in you being paid less than your salary:

  1. At some point or points during the year, you weren't paid for days that you did work. Maybe you took 4 hours of unpaid leave, but they didn't pay you for the whole day. If you save all your pay stubs, or if you get direct deposit and save your bank statements, it shouldn't take too long to find the few checks out of the year that are less than the others. Those differences should add up to somewhere in the neighborhood of $1,300 (closer to $1,000 after taxes). You then write up a nice polite letter explaining the exact pay periods in which some error occurred.

  2. For the entire year, you've been paid less than your agreed upon salary. You should be able to figure this out by looking at any paycheck. Calculate your hourly or daily or weekly rate based on your salary. Multiply that by the number of hours/days/weeks in a pay period and viola. By the way, this is the sort of error that would be better to find the first time it happens. Every time for the rest of your working life, if you get a raise or a new job, the first time you're supposed to get paid at this new rate, pull out your calculator and make sure they paid you the right amount.

The third option is that you've made some error. You actually did take $1,300 in unpaid leave. You forgot that you didn't start the job on January 1, you started on January 14, so those missing two weeks account for the missing $1,300. This works at the end of the year as well, if the last pay period ended on 12/23, then that paycheck would not accurate reflect your end of year pay (but your w-2 should). Or you forgot that there's some payroll deduction that you agreed to.

/r/personalfinance Thread