An Act To Provide Alternative Repayment Methods to Employees Overcompensated through an Employer Error
Maine Legislature, Session 128, LD 1345
Committee Amendment CA_A_H610 (House)
Amends: 26 MRSA §635

COMMITTEE AMENDMENT "fl " to H.P. 935, L.D. 1345, Bill, "An Act To 
Provide Alternative Repayment Methods to Employees Overcompensated through an 
Employer Error" 
Amend the bill by striking out the title and substituting the following: 
'An Act To Amend the Laws Governing Employer Recovery of Overcompensation 
Paid to an Employee' 
Amend the bill by striking out everything after the enacting clause and inserting the 
following: 
'Sec. 1. 26 MRSA §635, as enacted by PL 1989, c. 804, is amended to read: 
§635. Overcompensation by employer 
1. Definitions. As used in this section, unless the context otherwise indicates, the 
following terms have the following meanings. 
A. "Net amount" means the amount of money due an employee as compensation 
after any deductions or withholdings other than an employer's withholding for the 
purpose ofrecovering any overcompensation. 
B. "Overcompensation" means any compensation paid to an employee, including 
paid leave, that is greater than that to which the employee is entitled under the 
compensation system established by the employer, but does not include fringe 
benefits, awards, bonuses, settlements or insurance proceeds in respect to or in lieu of 
compensation, expense reimbursements, commissions or draws or advances against 
compensation. 
C. "Paid leave" has the same meaning as in section 636. subsection 1, paragraph C. 
2. Recovery of overcompensation; limits. An employer who has overcompensated 
an employee through employer error may not withhold more than -W% 5% of the net 
amount of any subsequent pay without the employee's written permission, except that, if 
the employee voluntarily terminates employment, the employer may deduct the full 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT ·fl" to H.P. 935, L.D. 1345 
amount of overcompensation from any wages due. 
An employer who has 
overcompensated an employee through employer error may not recover more than the 
amount of overcompensation paid to that employee in the 3 years preceding the date of 
discovery of the overcompensation. 
3. Violation. If an employer with over 25 employees violates this section, that 
employer forfeits any claim to the overcompensation. 
If an employer with 25 or fewer employees knows of the limitation established by 
subsection 2 and violates this section, that employer forfeits any claim to the 
overcompensation. 
Employers of 25 or fewer employees who do not know of the 
limitation established by subsection 2 and who violate this section shall must return all 
money withheld in excess of that permitted under subsection 2 within 3 days of written or 
oral demand by the employee, or forfeit any claim to the overcompensation. 
4. Application. This section is applied as follows. 
A. 
An employer has the burden of proof, except that, if the overcompensation 
amounts to less than 15% of the correct net amount of the employee's compensation, 
the employer must prove by clear and convincing evidence that the employee 
knowingly accepted the overcompensation. 
B. If an employee knowingly accepts the overcompensation, this section does not 
apply. 
C. This section, except for the forfeiture provisions in subsection 3, does not limit or 
affect an employer's general civil remedies against an employee or an employee's 
general civil remedies against an employer.' 
SUMMARY 
This amendment replaces the bill, which is a concept draft. It amends the definition 
of "overcompensation" by an employer to include compensation in the form of paid 
leave. It changes the maximum amount an employer can withhold from an employee's 
pay to recover overcompensation from 10% to 5%. It prohibits an employer from 
recovering more than the amount of overcompensation paid to an employee in the 3 years 
preceding the discovery of the overcompensation. The amendment also specifies that the 
section of law regarding overcompensation by employers that includes these provisions 
does not limit or affect an employee's general civil remedies against an employer. 
FISCAL NOTE REQUIRED 
(See attached) 
COMMITTEE AMENDMENT 
Approved: 02/21/18 feac::.. 
LD 1345 
LR 1471(02) 
An Act To Provide Alternative Repayment Methods to Employees Overcompensated through an 
Employer Error 
Fiscal Note for Bill as Amended by Committee Amendment •A{//,. 6 loj 
Committee: State and Local Government 
Fiscal Note Required: Yes 
Fiscal Note 
Limit to payroll recovery of overcompensation - All funds 
Fiscal Detail and Notes 
Reducing the maximum amount an employer can withhold from an employee's pay in order to recover 
overcompensation, including overcompensation of paid leave, from 10% to 5% will delay the State's ability to fully 
recoup payments to an employee made in error. Prohibiting an employer from recovering overcompensation paid to 
an employee in e1rnr to three years preceding the date of discove1y of the overcompensation may limit or eliminate the 
State's ability to recover the amount of the error. 
LR1471(02) - Fiscal Note - Page 1 of 1