Payroll Overpayments and Underpayments (Policy 7540)
University Policy 7540
Human Resources and Workforce Strategy, (208) 426-1616
Scope and Audience
This policy applies to University employees.
University Policy 6380 (Proper Funds Management)
1. Policy Purpose
To establish the process for identifying and resolving compensation overpayments and underpayments to University employees.
2. Policy Statement
Boise State University is committed to making timely and accurate compensation payments to its employees. However, due to errors in processing, timeliness of submission, or reporting, an employee may occasionally be paid more or less than is owed. This policy outlines the procedures for resolving compensation overpayments and underpayments. Employees, supervisors, departments, and Human Resources have the responsibility to prevent and report any overpayment or underpayment immediately, regardless of who made the error.
a. Human Resources is responsible for making timely and accurate compensation payments to employees subject to information provided by University departments and employees.
b. Supervisors are responsible for approving hours worked on the timesheet, and department administrators are responsible for reviewing payroll reports after each pay period to ensure there are no discrepancies in an employee’s pay.
c. Employees are responsible for reviewing their pay statements after each pay period to ensure there are no discrepancies in pay. Should an employee become aware of an overpayment or underpayment, the employee is responsible for reporting it directly to Human Resources and to their department administrator.
d. A department administrator who becomes aware of an overpayment or underpayment must report it to Human Resources as soon as the error is discovered.
4. Administration Process
When an error is reported, Human Resources will:
- Confirm the gross salary overpayment/underpayment;
- Calculate the net overpayment/underpayment due;
- Notify the employee of the overpayment/underpayment;
- In the case of overpayment, notify the employee of repayment options and provide the employee with an opportunity to choose an option;
- Document in the employee’s personnel file the notification to the employee , including any response by the employee and any repayment schedule;
- Manage the recovery process;
- Credit the department after the overpayment is fully recovered;
- Reconcile the overpayment amount;
- Complete a W-2C, if applicable.
5. Recovery of Overpayment
a. If the overpayment is less than $100, it will be deducted from the employee’s next paycheck following notification unless the employee arranges a different repayment option. An overpayment amount over the $100 can be repaid over a period of time, not to exceed one year, or an amount of time equal to the time over which the overpayment was incurred, whichever is shorter. Human Resources will perform due diligence to collect any overpayment in the calendar year in which the overpayment occurred.
b. Repayment options:
- Pay online using a debit or credit card
- Set up payroll deduction
- Repay by personal check
c. If the employee terminates employment before the overpayment has been fully recovered, Payroll may deduct the outstanding amount of the overpayment from the employee’s final paycheck including from any accrued vacation. If there is an unpaid amount left after the final paycheck deduction, the University reserves the right to continue the recovery process through the Accounts Receivable department, including external collections.
d. An employee must repay all overpayment amounts, regardless of how or why the overpayment occurred.
e. An employee’s department may not collect the overpayment or arrange a recovery schedule from the employee.
If Human Resources is notified and confirms an underpayment occurred, Human Resources will resolve the underpayment in the next paycheck following notification.