Overpayments

Overview

Payroll Services strives to pay employees correctly and promptly in accordance with  job, compensation, and time entry transactions processed and/or approved by departmental personnel each payroll cycle. We also understand that unexpected situations may arise with an employee or department which can cause the employee to receive compensation to which he/she is not entitled. If this happens, Payroll Services should be contacted as soon as the error has been discovered so they can assist with resolving the overpayment.

An overpayment is defined as compensation paid to an employee in excess of the amount owed for a given pay period. Overpayments are legal debts to the university and according to state law, must be repaid regardless of the origin, error or amount. Situations contributing to overpayments include, but are not limited to, delays in processing employment changes, unpaid leave, unpaid time off, separation from the university, data entry errors, and changes in work schedule.

 

Notification

When departments become aware that an employee has been overpaid, they should notify Payroll Services immediately. An email should be sent to the Payroll Services Payment Team which includes the employee’s name, UT EID, applicable dates, and a brief explanation of the cause for the overpayment. Timing of this notification is often the key to recovering the overpayment, and it is not necessary for departments to wait for  employment changes or time tracking to be final approved before contacting our office. Payroll Services will then evaluate the situation and respond accordingly.

 

Responsibilities

Departments are required to maintain an effective system of internal controls to prevent overpayments. All university employees and personnel who affect the pay process, including those who track and enter time, have a responsibility to assist in producing accurate and timely payrolls.

  • Employees are expected to accurately report time worked, review their payroll payments each pay period for accuracy, and promptly report any discrepancies. If an overpayment has occurred, repayment should be made as soon as possible, as required by state law.
     
  • Departments are responsible for monitoring payroll transactions and managing the financial resources for their respective areas. To that end, when an overpayment occurs, departmental contacts are expected to assist Payroll Services in efforts to recover funds in a timely manner and communicate directly with their employees. Additional payments should not be processed to employees who have been overpaid without first consulting with Payroll Services.
     
  • Payroll Services is responsible for reviewing each overpayment situation and ascertaining the best course of action for rectifying the error. They will manage the recovery process including canceling checks, reversing direct deposits, determining repayment options, calculating net overpayment amounts, depositing reimbursed funds, crediting the departmental account, correcting employee payroll records, and amending employee W-2 forms when applicable.

 

Communication and Repayment

Departments will notify their employee that an overpayment has occurred and communicate the repayment options after first consulting with Payroll Services. It is a department’s responsibility to maintain communication with their employee throughout the repayment process. Payroll Services is mindful that monetary issues can pose a hardship for employees and may be difficult to address. Communication and repayment of all overpayments should be undertaken with discretion and in a manner that preserves the integrity of all parties.

 

Unresolved Overpayments

There is no statute of limitations on indebtedness to the state. If efforts to recover an overpayment are unsuccessful after a reasonable period of time has elapsed, Payroll Services will record the uncollected debt on the employee’s university record, as well as with the State of Texas Comptroller of Public Accounts in accordance with Texas Government Code Sec. 403.055.

 

 

Last updated 11/8/2018