Employee Overpayments in OSPA
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Transcript of Employee Overpayments in OSPA
2
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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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
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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
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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
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Spreadsheet Available
Overpayment RecoveryEmployee Name
Gross Overpayment 3608.00 184 hrs march 06 LWOP 3608EE FICA 7.65% (SS 6.2% MEDR 1.45%) 276.01 OSPS will recover from IRS
ER Share Fica (same calc) 276.01 OSPS will recover from IRSPERS Pickup 216.48 Agency Recovers From PERSPERS Employer Share (8.69% or 11.65%) 313.54 Agency Recovers From PERS
Total To Recover 4414.03
Employee must repay Agency 3331.99 For gross less employee FICA
Reconciliation (No Formulas) Benefit TransactionsUnion Dues To Recover
Recovered From EE Other transactionsRecovered From IRS Leave AdjustmentsRecovered From PERS Total Recovered = Total Agency Costs
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Written Notice
Amount owed Supporting documentation Opportunity to respond within # days If opportunity for monthly payments
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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
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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
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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.”
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Methods to Recover
OSPA automatically deduct from next pay
Single cash payment Monthly repayment plan, either through
OSPA or cash payment
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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
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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
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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
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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
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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
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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