Employer made a mistake, paid my city taxes and now asks for reimbursement. Is this legal?

So I work in a restaurant and the corporate office let my manager know that they forgot to withhold city tax on all of the employees' paychecks. They put it all on him, had him write a letter demanding the amount we supposedly owe by way of a check made out to the restaurant. Most of the people in my restaurant do not speak English and have very little agency to protect themselves. Besides that most would be in such a low tax bracket that if the company had correctly filled out our W-2's most would have gotten tax refunds from the city back. Since the restaurant paid the amount, clearly a new W-2 for each person cannot be filled out and thus although we all would more than likely have gotten a partial refund, we are forced to reimburse the restaurant for the full amount. The corporate office has been shady about it from the beginning, originally submitting amounts based on this years tax of 2.25% although the tax last year for 2009 (the year in question) was only 2%. They fixed the problem and resubmitted our amounts, but I just don't understand how they didn't catch that in their accounting of the taxes they are owed... just randomly demanding 2.25% of everyone's income without paying attention to tax percentages??? I only owe $120 but there are low-income people who are now expected to submit a check for anywhere from $80-$900 to corporate. Do they have any legal support to demand reimbursement from us when it was their mistake and they aren't accounting for potential refunds? I'm attending law school next year and will probably be contacting my tax law professor, but I was wondering if anyone knew anything on here as well. Thanks for any help you can give!!!