2014 - Handling Payroll Overpayments Correctly

Instructor: Vicki M. Lambert
Description:
This webinar discusses the issues that arise when an overpayment has been made in the payroll department. It addresses the requirements that must be followed for recouping the overpayment under IRS and wage and hour regulations.
Employees can be overpaid in even the most well managed payroll department. Yes it does happen when mistakes are made but it isn't always the result of an error. Perhaps the employee received a sign on bonus but did not stay for the required length of time. Or the employee was advanced vacation but is now terminating before he or she has fully earned the time. No matter the reason, overpayments can and do happen and must be handled properly. The first questions that usually arise relate to IRS regulations. What is required if the overpayment occurred this year? But 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? We will discuss these regulations and more including the private letter ruling that governs the IRS requirements.
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. We will examine the FLSA requirements on recouping overpayments including the 1998 opinion letter that spells out these requirements.
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! 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? We will discuss how to conduct research to determine the state's requirements for handling overpayments. We will review the wage and hour laws of several states and the factors that they use to determine if an overpayment can be recouped.
So the question you have to ask yourself is: Are you and your department prepared to handle overpayments compliantly and effectively?
Why Should you Attend:
Attend this 90 minute presentation to gain knowledge of how to handle overpayments in the payroll department under IRS and wage and hour laws.
Objectives of the Presentation:
By the end of this webinar the attendee will have learned:
Why a 1990 IRS Private Letter Ruling on handling overpayments applies today
How to correct overpayments made in the same calendar tax year
Why asking for the gross is better than the net check for prior year overpayments
How to correct FICA taxes for a prior year overpayment
How to correct FUTA/SUI taxes
To use Form W-2 or Form W-2c to report overpayments
The standards under the FLSA in terms of timeframe for recouping prior year overpayments
If a written agreement for repayment is always required under the FLSA
Whether collecting overpayments from exempt employees affects salary basis compliance
The effects of recouping overpayments on minimum wage and overtime requirements
Whether or not employers can treat advanced vacation payments as overpayments if an employee terminates
Where the states stand on recouping overpayments
Who can Benefit:
Payroll professionals
Human Resources
Accounting Personnel
Business Owners
Lawmakers
Attorneys
Any individual or entity that must deal with handling overpayments in the payroll department.
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