Previous employer sent me to collections for overdrawn PTO

Submitted by messfree t3_z7t9up in personalfinance

I used to work for Company A (let's call them CA) for many years, until they sold off our division in April of this year. I took an early vacation in March of this year, and had used more PTO days than I had accumulated up until that point of the year - so when my company was separated from CA, I had a negative balance of PTO.

Fast forward to today, and I receive a debt collection notice informing me that I owe CA $300 for 2 days of PTO that were overdrawn. No effort by CA was made to reach out to me directly to settle this at any time, just straight to collections... Or, you would think that CA would work this out with the HR department of the new spin-off company.... but I digress. (The noticed in the mail stated there was not yet anything overdue or any penalty just yet)

What are my options here? CA does have an ex-employee portal that I can use to repay the money that is owed - so I see the following:

  1. Pay CA directly to settle the debt
  2. Pay the debt collector directly to settle the debt
  3. Is there another option now that it's gone to a debt collector? Can this amount now be negotiated down?

Are there advantages or disadvantages to any of these options? Thank you much

EDIT: It looks like there is actually a company called CA - Computer Associates, but this is not the company I am currently dealing with 🙂 just the quickest acronym I went with

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Comments

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mikegus15 t1_iy82odj wrote

Imo you would call the company's billing dept and ask for physical proof (not just someone on the other line saying "yep")

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Coronator t1_iy8blbe wrote

I’ve never heard of a company going after an employee for $300 in “PTO Debt”. That’s insane to me, and a waste of company resources. If they really cared that much about it, they shouldn’t have paid you for the negative balance PTO to begin with.

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amysteriousperson001 t1_iy8codi wrote

Get proof that it really is your debt; send them a request for a debt verification.

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Liquidretro t1_iy8dleo wrote

Replying to mikegus15 (#762,385)

I would also probably raise hell (respectfully) with your current manager and HR. This isn't how you do this, mistakes happen and policies change, especially in mergers or acquisitions. Treating employees like this is a great way to tank company moral and cause internal dissatisfaction with the new company.

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messfree OP t1_iy8u40c wrote

Replying to mikegus15 (#762,385)

Thanks for the reply - the ex-employee portal shows the overpayment/debt in detail - so the proof is there, I'm not disputing this part of it. But yeah, as others have pointed out, it's a really crappy thing for them to come back 6 months down the line and ask for money back (especially considering how trivial the amount is to CA - they're probably a fortune 50 company).

I've contacted my new HR department and their response was pretty much "This is between you and CA now, we have nothing to do with it."

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messfree OP t1_iy8uru8 wrote

Replying to Coronator (#764,695)

Thanks for the reply. I agree this sounds list a complete waste of time/resources for them, CA is definitely a company most people have heard of and while it's a decent amount of money to me, it's nothing to them. I guess the computer tells them that I was overpaid (and I agree, I was), so they're going to chase it... It's just the way they went about it that's frustrating.

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FireBeyond t1_iy91asv wrote

Replying to messfree (#769,200)

>I've contacted my new HR department and their response was pretty much "This is between you and CA now, we have nothing to do with it."

I would actually dispute that.

Company/division spin offs/sales are typically of two types: 1) IP only, and 2) whole entities.

Given that the employees went with the company to the new owner, they were "made whole" for their assets and liabilities. Your PTO should have been zeroed out or, worst case, the negative balance transferred to the new company.

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messfree OP t1_iy93erv wrote

Replying to FireBeyond (#771,014)

They way it was worded is that at the termination of business with CA - anyone who had a positive PTO balance was paid that amount, and anyone with a negative PTO balance (me) was charged.

I had the same thought as you mentioned, where the PTO balance would have carried over to the new company, but that doesn't seem to be the case. Both HR departments are being very specific that the PTO balances from each company are completely separate and since I used more than I had when working for CA, I am responsible.

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Leading-Hat7789 t1_iy95pan wrote

Verify with CA that they sent the debt to collections. Try to understand why. Negotiate the amount down with the debt collector then get an a signed agreement on payoff.

If you want to be punitive, call/email CA about this several times. Make sure it costs then time and money to deal with you. Hopefully, they won’t do this with next employee.

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FireBeyond t1_iy97fws wrote

Replying to messfree (#771,535)

Yeah, that sounds very much like your old company screwed all its old employees, and "sold you out" as part of the sales negotiations.

That being said, still a challenge. Did you sign a new employment contract with the new company? Because if not, they can't unilaterally impose an obligation on you because they decided not to transfer things.

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messfree OP t1_iya2vo4 wrote

Replying to Leading-Hat7789 (#772,113)

Thank you for the reply. I've asked the HR team at CA why it was sent to collections but haven't heard back yet. Going through their ex-employee portal, there are notes that emails were sent to my old email address at CA, which - surprise! - no longer existed since I was no longer an employee at that point. They still know my home address and phone number, so there is zero reason why a postal letter from collections should have been the first knowledge of the debt on my end.

Should I contact the collections agency at all? Or, if they call, should I even answer? Not sure what precedents or expectations are set if I talk to them.

Also, I've read that if I negotiate a lower payment with collections, it would be reported as "paid as agreed" instead of "paid in full". Would this affect my credit at all? Would this even being sent to collections in the first place do anything to my credit?

And, oh yes, I'm going to waste as much of their time as possible!

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riverrabbit1116 t1_iyage6x wrote

First ask to have the debt verified. Second, check the laws for your jurisdiction, some locations limit the look back period for recovering payroll overpayments. Find out if there's a limit in your location.

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