According to Article 127 of the Labour Code of Ukraine (КЗпП), if an employer mistakenly transfers an employee’s salary twice for the same month, they do not have the right to automatically withhold the excess from the next payment.
When an employer is entitled to withhold overpayments
Withholding from wages to recover overpaid amounts is permitted only in the event of a calculation (arithmetical) error. According to lawyers, it is important to distinguish a calculation error from a technical error in the payment order.
A calculation (arithmetical) error is an error in calculating the amount the employee should have received; in such a case the employer may demand repayment of the funds within the established procedure. If it is a technical error in the payment order, the employer is responsible for it and has no grounds to withhold the employee’s funds.
Time limits and maximum amount of withholdings
The order to withhold overpaid funds must be issued by the employer no later than one month from the date of the mistaken payment. If the accounting department notifies the employee of the error only after two months, the employer loses the right to recover the amount extrajudicially under this procedure.
At each payment the total amount of all withholdings cannot exceed 20% of the amount due to the employee, so it is prohibited to withhold the entire overpaid sum from the next salary at once. Wages and payments equated to them, voluntarily provided to a person as a means of subsistence, are not subject to repayment.
How to appeal an unlawful withholding
If the accounting department unilaterally withholds funds from the next payment in violation of the time limits or the 20% limit, such actions can be challenged. Employees may file a complaint with the State Labour Service of Ukraine or bring a claim in court to recover unlawfully withheld wages.
Extrajudicial withholding refers to actions by the employer to deduct funds without a court decision; if such actions occurred after the expiry of one month or with an excess of the established percentage, the employee has grounds to apply to the state authority or to the court.
