When some Bath Iron Works employees opened their paychecks last week, they were surprised to see an extra $500-$800 — and in one case, $1,000.
Unfortunately for them, it wasn’t a raise or a bonus but a mistake.
At least 120 workers were affected, according to Devin Ragnar, spokesperson for Local S6, BIW’s largest union. He said Monday night the company and union were still figuring out exactly how many workers were overpaid and by how much.
Employees will have to return the money.
Shipyard officials met with union officials Monday and agreed to work with individual employees on repayment plans, whether through lump-sum payments, installments or deductions from future paychecks, according to Ragnar.
“The company is working well with us now,” Ragnar said. “They’re doing everything they can to square this away.”
Companies that overpay workers are entitled to recoup the money, according to the federal Fair Labor Standards Act. Maine law dictates that companies that overpay workers cannot deduct more than 5% of subsequent paychecks toward the repayment amount.
In a statement, BIW said, “There were a limited number of employees who had an overpayment related to vacation time. We are actively working with the employees, in consultation with their union, to set up repayment plans to resolve the issue.”
Union officials were unhappy with how the shipyard initially handled the overpayments. Ragnar said shipyard officials, before contacting the union, asked workers to sign agreements to repay the overpayments in full or in two installments. That prompted the union to send a cease-and-desist letter Friday.
“Their response was less than ideal,” Ragnar said. “I would have hoped they would have reached out to us.”
Ragnar said payroll mistakes at the shipyard are not uncommon, though he can’t recall one that affected this many employees.
“It’s a big company,” he said. “Mistakes are made.”
Local S6 represents about 4,250 of the shipyard’s roughly 7,000 workers.
BIW isn’t alone in making the occasional payroll error.
Last year, Honda said it overpaid bonuses to some workers at its car factory in Marysville, Ohio, according to NBC4 WCMH. Some workers were overpaid by hundreds of dollars, and the company gave workers the option of repaying the company by paying a lump sum, taking the money out of future paychecks or deducting it from future bonuses, according to the news station.
Also last year, St. Charles Health System in Oregon said it overpaid $2 million to about 2,000 workers after its payroll system was hacked, according to Oregon Public Broadcasting. The system originally asked for the money back but later relented and said the workers could keep the money as it sought damages from the payroll company, according to the broadcaster.
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