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Handling Payroll Overpayments Correctly (2015 Edition) (HRMO53V)

Presented by: Vicki M. Lambert, CPP
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Pre Recorded Webinar
90 minutes
  •  Thu, October 8, 2015
Event Description
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1.5 Credits
1.5 Credits
1.0 CPE
1.5 PDC - AudioSolutionz is recognized by SHRM to offer Professional Development Credit (PDCs) for the SHRM-CPSM or SHRM-SCPSM

Get Expert Strategies to Help Your Payroll Department Handle Overpayments Compliantly and Effectively!

If your employees are being overpaid, it doesn't mean that your payroll department is not well managed. The employee might have received a sign-on bonus but did not stay long enough or is leaving before earned time after being advanced a vacation. An error in payroll calculation might be an exception not always the rule. However, overpayments can and do happen and must be handled properly.

The most important questions on overpayments relate to IRS regulations. Those being:

  • What is required if the overpayment occurred this year?
  • What if it occurred in a previous tax year, does that change the rules?
  • Are the rules different for federal income tax than they are for social security or Medicare taxes?

But recouping overpayments is much more complex than just adhering to IRS code! Wage and hour law compliance must also be honored when dealing with overpayments. Before the payroll department even needs to determine 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 nonexempt employees must be considered when recovering overpayments from employees.

And of course, the overpayment did not occur in a vacuum when it comes to state laws. Each individual state may have their own compliance issues involving wage and hour laws. When it comes to state law compliance in overpayments, you must have answers to the following questions:

  • Is there a time limit for recouping the overpayment in that state?
  • Does the employee have to be notified in advance before the deductions can begin?
  • Or does the state just say NO! to the whole process?

This session by payroll expert, Vicki Lambert, CPP, will discuss the IRS regulations and the private letter ruling that governs the IRS requirements while getting into other important details to handle overpayments effectively and compliantly. Vicki will also examine the FLSA requirements on recouping overpayments including the 1998 opinion letter that spells out these requirements. Additionally, she will discuss how to conduct research to determine the state's requirements for handling overpayments, and review the wage and hour laws of several states and the factors that they use to determine if an overpayment can be recouped.

This webinar will discuss the issues that arise when an overpayment has been made. It 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.

Session Highlights:

Handling Overpayments under IRS and State Tax Codes:

  • Why a 1990 IRS Private Letter Ruling on handling overpayments applies today
  • Correcting overpayments in the same calendar tax year
  • Why asking for the gross is better than the net check for prior year overpayments
  • Correcting FICA taxes for a prior year overpayment
  • Correcting FUTA/SUI taxes
  • Using Form W-2 or Form W-2c to report overpayments

Wage and Hour Laws and Their Impact on Recouping Overpayments:

  • The standards under the FLSA in terms of timeframe for recouping prior year overpayments
  • Is a written agreement for repayment always required under the FLSA
  • Collecting overpayments from exempt employees and its effect on salary basis compliance
  • Recouping overpayments and its effect on minimum wage and overtime requirements
  • Can employers treat advanced vacation payments as overpayments if an employee terminates
  • Where do the states stand on recouping overpayments

Who Should Attend

Payroll and other accounting professionals who are responsible for correcting overpayments made to employees.

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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