If the employee has been paid in excess of what he or she has earned, the employee will need to return the overpayment to the Company as soon as possible. This chapter deals with state law provisions identifying, establishing, and collecting overpayments.All states have provisions addressing these matters. Best practice in my opinion is to void the overpaid paycheck and reissue corrected amount in your payroll system. Overpayment: When a state agency finds it has paid a worker UI benefits the worker was not entitled to.