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Employee Overpayments in OSPA. Oregon Statewide Payroll Services March 11, 2010. Class Objective. Raise awareness of the following: Identifying overpayments Choices agencies have in handling overpayments Calculating the overpayment Repayment entries When to request a Corrected W-2.

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employee overpayments in ospa

Employee Overpayments in OSPA

Oregon Statewide Payroll Services

March 11, 2010

class objective
Class Objective
  • Raise awareness of the following:
    • Identifying overpayments
    • Choices agencies have in handling overpayments
    • Calculating the overpayment
    • Repayment entries
    • When to request a Corrected W-2
  • Overall process
  • Net pay negatives
  • Year-end
  • Specific examples
what is our responsibility
What Is Our Responsibility?
  • To make the Joint Payroll Account (JPA) whole
  • To make the agency whole
  • To accurately report and pay the employee’s wages and taxes
what guidelines do we have
What Guidelines Do We Have?
  • OAM 45.50.00.PO and PR Collection of Overpayment
  • Collective Bargaining Agreements
  • Agency Policy and Business Practices
  • IRS and DOR Regulations
  • PEBB Rules and Guidelines
overall process
Overall Process
  • Research what happened
  • Determine gross pay received
  • Determine what employee should have received
  • Does CBA or OAM apply?
  • Notify the employee in writing
  • Agree on repayment plan and put in writing
written notice
Written Notice
  • Amount owed
  • Supporting documentation
  • Opportunity to respond within # days
  • If opportunity for monthly payments
written notice cont d
Written Notice Cont’d
  • Explanation of what will happen if payment not received:
    • Automatic repayment plan
    • Account assigned to collection
  • Informed consent required to send debt to DOR Restricted Program
  • Employee’s signature to acknowledge and authorize deductions
informed consent
Informed Consent
  • DOR Restricted Program requires use of SSN
  • Section 7, Privacy Act of 1974, 5 USC 552a requires:
    • Whether disclosure is voluntary or mandatory
    • By what statutory or other authority you are soliciting the SSN
    • How you will use the SSN
informed consent cont d
Informed Consent Cont’d
  • “Should I not repay the overpayment as agreed, I give my permission to release my SSN to the Oregon Department of Revenue. I understand that my action is voluntary and that the agency will only use my SSN for collection purposes under ORS 292.063 and ORS 293.250.”
methods to recover
Methods to Recover
  • OSPA automatically deduct from next pay
  • Single cash payment
  • Monthly repayment plan, either through OSPA or cash payment
cash payment
Cash Payment
  • Agency may receive in any form acceptable to agency
  • For JPA, DAS, must be:
    • Money order
    • Cashier’s check
    • State warrant
    • Balanced transfer from R*STARS
    • Agency revolving fund check
net pay negatives
Net Pay Negatives
  • Adjustments may create net pay negative
  • OSPS receives Net Pay Negative Report
    • Employee on report if not recovered in first month after becomes negative
    • 1st and 2nd month on report OSPS Accountant will contact agency
    • 3rd month on the report OSPS Manager will contact
net pay negatives cont d
Net Pay Negatives Cont’d
  • OAM 45.50.00.PR requires reimbursement to the JPA for net pay negatives
  • If agency reimburses the JPA, set up an account receivable outside OSPA
overpayments at year end
Overpayments at Year-end
  • IRS Publication 15 (Circular E)
    • Wages paid in error remain taxable to the employee until repaid
    • Employee received and had use of the funds
    • Employee does not amend the tax return, claims deduction in year repaid
  • OSPA Reference Manual, Recommended Practices,
    • Taxes, Corrected W-2 (W-2c)
    • Year-end
examples for class
Examples for Class
  • Employee’s LWOP reported after run 1
  • Employee received clothing allowance through both R*STARS and OSPA
  • Employee mistakenly received work-out-of-class (WOC) through the PPDB
examples cont d
Examples Cont’d
  • Employee compensated by SAIF and had full-time paid leave through OSPA
  • Employee has domestic partner insurance and no DPT on P050
Please remember to do survey in iLearnOregon
  • Next Forum – March 17, 2:00 to 4:00 pm, Mt. Mazama Rm, 1225 Ferry St. SE
  • April class – Employee Separations in OSPA