Handling Payroll Overpayments Correctly

Instructor: Vicki M. Lambert
Product ID: 703942
  • Duration: 90 Min

recorded version

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This training program will examine the FLSA requirements on recouping overpayments including the 1998 opinion letter that spells out these requirements. It will also focus on issues such as exempt employee status, minimum wage and overtime rules for nonexempt employees must be considered when recovering overpayments from employees. Additionally, it will review the wage and hour laws of several states and the factors that determine if an overpayment can be recouped.

Course "Handling Payroll Overpayments Correctly" has been pre-approved by HRCI as eligible for 1.5 credits towards a participant's recertification upon full completion.
“The use of this seal is not an endorsement by the HR Certification Institute of the quality of the program”.

Why Should You Attend:

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?
  • 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?

This webinar will discuss these regulations and more including the private letter ruling that governs the IRS requirements. Recouping overpayments is much more complex than adhering to the IRS code. Wage and hour law compliance must also be honored when dealing with overpayments. Before the payroll department determines IRS requirements, they must first determine if recouping the over payment is even legal under the FLSA. 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?

The course will also discuss how to conduct research to determine the state’s requirements for handling overpayments. It will review the wage and hour laws of several states and the factors that they use to determine if an overpayment can be recouped.

Areas Covered in the Webinar:

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 Will Benefit:

  • Payroll Professionals
  • Human Resources professionals
  • Accounting Personnel
  • Business Owners
  • Lawmakers
  • Attorneys
  • Any individual or entity that must deal with the complexities and technicalities within the payroll process

Instructor Profile:

Vicki M. Lambert, CPP, is president and academic director of The Payroll Advisor™ a firm specializing in training payroll professionals. With over 35 years 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 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.

Ms. Lambert has lectured extensively on payroll administration and compliance issues for clients that have included Automatic Data Processing, CCH Incorporated, Ceridian Employer Services, and The Employer Group. Ms. Lambert has also served as a consultant and in-house trainer for businesses such as Sun Microsystems, Paychex, Fox Studios, Disney, County of Riverside, and City of Hesperia.

Ms. Lambert is an adjunct faculty member at Brandman University in Southern California. She is the creator of and the instructor for the Practical Payroll Online program offered through the School of Extended Education. Ms. Lambert currently produces and presents audio seminars and webcasts for clients and business groups throughout the country.

Topic Background:

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.

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