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?
Recouping overpayments is also much more complex than just adhering to the 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 overpayment 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! 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?
Areas covered in this Training:
-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's 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
Why attend this training-
We will discuss these regulations and more including the private letter ruling that governs the IRS requirements. We will examine the FLSA requirements on recouping overpayments including the 1998 opinion letter that spells out these requirements. We will also 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.
After attending this webinar, you will able be tackle the recouping of the overpayments, wage and hour compliance issues of various states & how to comply them, and all the payroll issues involving overpayments.
Duration: 90 Minutes
-Payroll Executives/Managers/Administrators/Professionals/Practitioners/Entry Level Personnel
-Human Resources Executives/Managers/Administrators
-Business Owners/Executive Officers/Operations and Departmental Managers
-Any individual or entity that must deal with the complexities and requirements of Payroll compliance issues
You may ask your Question directly to our expert during the Q&A session.
Vicki M. Lambert, CPP,
is President and Academic Director of The Payroll Advisor™, a firm specializing
in payroll education and training. The company’s website www.thepayrolladvisor.com offers a payroll news
service which keeps payroll professionals up-to-date on the latest rules and
With nearly 40 years of hands-on experience in all facets of payroll
functions as well as over three decades as a trainer and author, Ms. Lambert
has become the most sought-after and respected voice in the practice and
management of payroll issues. She has
conducted open market training seminars on payroll issues across the United
States that have been attended by executives and professionals from some of the
most prestigious firms in business today.
A pioneer in electronic and online education, Ms.
Lambert produces and presents payroll-related audio seminars, webinars, and
webcasts for clients, APA chapters, and business groups throughout the country.
Ms. Lambert is an adjunct faculty member at Brandman University in Southern
California and is the creator of and instructor for their Practical Payroll
Online program, which is approved for recertification hours by the APA. She is
also the instructor for the American Payroll Association’s “PayTrain” online program
also offered by Brandman University.
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