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Comply with Payroll Overpayments Regulations (HRM841Z)

Presented by: Vicki M. Lambert, CPP
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Pre Recorded Webinar
90 minutes
  •  Wed, August 6, 2014
Event Description
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Recouping Payroll Overpayments is a Challenging Process.  Learn How to Walk the Regulation Tightrope and Establish Clear Policies For Handling Overpayments.

Employees can be overpaid in even the most well managed payroll department.

Overpayment may be due to a mistake or an error; however, there are other instances that can result in overpayment to an employee. For example, an employee may have received a sign on bonus but did not stay for the required length of time, or the employee took advanced vacation but is now terminated before he or she has fully earned the time.

Regardless of how an overpayment happened, it must be handled properly.  It is important to ensure that overpayment is recouped in accordance with IRS Regulations. It's important to check if the overpayment happened in the current year or the previous tax year, and the appropriate regulations and steps need to be followed. There may also be different rules for federal income tax or for social security or Medicare taxes. This session with payroll expert Vicky Lambert, CPP, will explore these regulations and more, including the private letter ruling that governs the IRS requirements.

Recouping overpayments is much more complex than just adhering to IRS code. Wage and hour law compliance must also be honoured when dealing with overpayments. Before the payroll department determines the IRS requirements they must first determine if recouping the over payment is even legal under the FLSA. Issues such as exempt employee status, minimum wage and overtime rules for non exempt employees must be considered when recovering overpayments from employees. In this audio session, Vicki will examine the FLSA requirements on recouping overpayments including the 1998 opinion letter that spells out these requirements.

Each individual state may have their own compliance issues involving wage and hour laws. Issues that need to be considered when dealing with recoupment of overpayment in states include checking if a time limit applies to recouping overpayment in a state, whether the employee needs to be provided advance notification before deductions begin and even whether state law allows recoupment of overpayment. In this session, Vicki will discuss how to conduct research to determine the state's requirements for handling overpayments, and also review the wage and hour laws of several states and the factors that they use to determine if an overpayment can be recouped.

Vicki will shed light on the issues that arise when an overpayment has been made and will address the requirements that must be followed to help the payroll department establish a clear policy on handling overpayments that keep it in compliance with federal and state laws and regulations.

Topics covered in the session:

Insights on Handling Overpayments under IRS and State Tax Codes:

  • Find out why a 1990 IRS Private Letter Ruling on handling overpayments applies today
  • How to correct overpayments in the same calendar tax year
  • How to correct overpayments in prior calendar year
  • Learn why asking for the gross is better than the net check for prior year overpayments
  • Ways to correct FICA taxes for a prior year overpayment
  • How to correct FUTA  and SUI taxes
  • Report overpayments using Form W-2 or Form W-2c

Overview on Wage and Hour Laws and their impact on Recouping Overpayments:

  • FLSA requirements in terms of timeframe for recouping prior year overpayments
  • Information on the FLSA Field Operations Handbook (FOH)
  • Find out whether a written agreement for repayment is always required under the FLSA
  • Recommendations for collecting overpayments from exempt employees and its effect on salary basis compliance
  • The effect of recouping overpayments on minimum wage and overtime requirements
  • Can an employer treat advanced vacation payments as overpayments if an employee is terminated? Get the answer!
  • State Regulations regarding Recouping of Overpayments

This webinar will help you understand more about:

  • Wage and Hour Compliance
  • Exempt Employees
  • Vacation Pay in FOH
  • State Requirements
  • IRS and State Tax Codes
  • 1990 IRS Private Letter Ruling
  • Federal Income Tax Rules
  • FICA Tax Rules
  • State Tax Regulations

Who should attend

All those responsible for correcting overpayments made to employees:

  • HR professionals
  • Payroll officers
  • Accounting professionals
  • Others
About Our Speaker(s)

Vicki M. Lambert | Payroll Training SpeakerVicki M. Lambert CPP
Vicki M. Lambert, CPP is President and Academic Director of The Payroll Advisor™ a firm specializing in the training of payroll professionals. With over three decades of hands-on experience in all facets of payroll functions as well as over 20 years as a trainer and author, Ms. Lambert is a sought-after and respecte... More info

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    Event Title: Comply with Payroll Overpayments Regulations
    Presenter(s): Vicki M. Lambert, CPP

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