Recovering Wage Overpayments (2021 Updates)

Recovering wage overpayments can be a time-consuming and sometimes challenging process for payroll professionals. Accuracy is an essential element in the payroll process, but error-free payrolls are rare. A survey by Cyber Shift and the American Payroll Association found that 20 percent of employers reported error rates of 1 to 5 percent of payments during typical payroll processing. State laws governing recovery of overpayments and adjustment of related taxes often vary from the federal rules and from state to state. Recovery may be difficult or cause hardship for employees, particularly in termination cases.

Understanding your compliance obligations and responsibilities to your employees is critical. Recovery of an overpayment may also create reporting and recordkeeping issues related to taxes and fringe benefits. Use of improper or illegal recovery methods may lead to the imposition of fines, penalties, or other sanctions on an employer. This webinar from expert Patrick A Haggerty will give participants the tools to analyze all types of employee overpayments and when overpayments may be recovered using payroll deduction and when payroll deduction may be limited by state or federal wage and hour laws or when employee consent is required.

Areas Covered

• Know the common causes of wage overpayments
• Understand how company policies and controls can minimize wage overpayments or mitigate the effects of wage overpayments
• Know the federal and state rules with regard to recovery of overpayments and the consequences of non-compliant recovery methods.
• Understand the procedures for reporting recovery of wage overpayments during the year of overpayment, a subsequent year, and for partial repayments. This includes discussion of special problems with fringe benefits based on wages and corrections or amendments to payroll and wage reports such as Forms 941 and W-2.
• Know how to compute and report tax adjustments for repayments. • Best practices for avoiding, detecting, and controlling wage overpayments.
• Employment terminations will be discussed as an area of particular susceptibility to wage overpayments and how problems related to terminations can be minimized.
• How establishment and communication of employer policies and internal controls can prevent overpayments and minimize costs.
• Tax computations when there is a partial recovery.
• The common causes of overpayments such as late termination paperwork, leave of absence errors and failure to terminate automatic payments.

Why You Should Attend:

Wage overpayments can be a source of significant cost in terms staff time spent in analysis and correction. Compliance issues and errors made during the correction process can add to the costs. In the case of overpayments, employers must abide by federal and state wage laws, and cannot simply deduct money from an employee’s paycheck. In some cases, this could result in a violation of minimum wage or overtime rules or the requirement to pay full salary to exempt employees. In a number of states, employers may not recover wage overpayments through payroll deduction without the consent of the employee.

In this session expert speaker, Patrick Haggerty will discuss the issues that arise when an overpayment has been made. It will address the requirements that must be followed to help the payroll department establish a clear policy on handling overpayments that keep it in compliance with federal and state laws and regulations.

Who Should Attend:

• Payroll Supervisors and Personnel
• Payroll Consultants
• Payroll Service Providers
• Public Accountants
• Internal Auditors
• Tax Compliance Officers
• Enrolled Agents
• Employee Benefits Administrators
• Officers and Managers with Payroll or Tax Compliance Oversight
• Company / Business Owners
• Managers/ Supervisors
• Public Agency Managers
• Audit and Compliance Personnel / Risk Managers.
• HR Professionals

Speaker(s)

Patrick A. Haggerty, EA

Pat Haggerty is a tax practitioner, author, and educator. His work experience includes non-profit organization management, banking, manufacturing accounting, and tax practice. He began teaching accounting at the college level in 1988. He is licensed as an Enrolled Agent by the U. S. Treasury to represent taxpayers at all administrative levels of the IRS and is a Certified Management Accountant. He has written numerous articles and a monthly question and answer column for payroll publications. In addition, he regularly develops and presents webinars and presentations on a variety of topics including Payroll tax issues, FLSA compliance, information returns, and accounting.

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Credits: 1.5

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Credits: 1.5

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Credits: 1.5

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