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Kroger Orders Employees to Repay Some Emergency Pay, Then Changes Its Mind

By Rhian Hunt – May 19, 2020 at 7:00PM

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The initial letter informing workers of the overpayment threatened collection action.

Following an accounting error that sent some employees extra money above what they were supposed to receive as part of its "Emergency Pay" program, Kroger (KR -1.41%) demanded return of the funds. However, after a strongly negative response on Twitter and elsewhere, the company retracted the demand, instead saying the workers could keep the surplus pay.

Kroger's payroll department sent out letters to the employees who had received the accidental overpayment. The letter threatened that "failure to repay the overpayment could result in further collection efforts," while giving the workers three different options to return the funds to the company. These included a lump sum payment or either two or three partial payments. In all cases, the employee was to sign the letter and return it as an authorization to deduct the payments from upcoming paychecks.

A past due notice.

Image source: Getty Images.

One of the workers went to Twitter to post the letter, which in that specific case ordered the employee to return $461.60. That touched off an angry response from many users. Many claimed they would stop shopping at Kroger, with one terming the action "breathtakingly evil" and another posting a list of Kroger's store brands so other people could identify and avoid them.

Shortly after the social media furor began, Kroger announced, "We've instructed our payroll department to directly inform the small number of associates affected by the recent overpayments of Emergency Leave of Absence pay that we will not seek repayment."

The company had already drawn some controversy by ending its $2 hourly Hero Bonus, paid during the coronavirus outbreak. According to PayScale, an average Kroger worker earns $10.53 hourly, with many jobs, such as cashier, deli clerk, and produce clerk, receiving less than $10 per hour.

Rhian Hunt has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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