Honda overpays employee bonuses; now seeks full refund

Japanese automaker Honda sent a memo to its employees at Ohio-based Marysville factory which said the company overpaid bonuses and that it needs a refund of the extra money. Marysville plant produces cars like Accord, CR-V, Integra, TLX and NSX.

This memo offers employees time till September 22 to choose whether they want the amount they owe to be taken from future paychecks, deducted from future bonuses or paid upfront. Employees, however, claimed that this refund could be tough on their families.

Failing this, Honda could deduct from future bonuses by default, according to an NBC4.com report. Confirming the development, a Honda spokesperson told the media house in an emailed statement that matters pertaining to employee compensation are sensitive and that they are working quickly to minimise any impact on their associates.

Experts also believe that Honda might go the legal route if employees don't pay back the money. Law professor at Ohio University Sarah Cole said, “Under the Fair Labor Standards Act, which applies to all employers in the United States, it’s quite clear that overpayments of bonuses or wages can be recouped by the employer.”

This development comes almost a month after Honda claimed it would have to slash production plans by around 40 per cent in Japan citing supply chain and logistical issues. The automaker attributed these issues to COVID-19 and semiconductor shortages, impacting the production of Vezel sports utility vehicle, Stepwgn minivan and Civic compact car.

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Also read: Honda to cut output by up to 40% at Japan plants on supply disruptions