An overpayment occurs when an employee is paid in excess of what is due. Regardless of how or why an overpayment occurred, as a state agency, the University of Washington is required by law to recover overpaid funds.
On This Page:
Understanding Responsibilities
Department/Employee Responsibilities
The department is responsible for:
- Proactively monitoring for and preventing overpayments. Departments should regularly run payroll-impacting reports in Workday to proactively monitor for (and ideally) prevent overpayments.
- Reporting the overpayment to the Payroll Office. An overpayment can be reported by an employee or discovered by the employee’s department during a review of their payroll reports.
- Securing repayment for timely and accurate recovery of funds. Follow the guidance in the How to Correct an Overpayment section, below.
- Explaining the overpayment to the employee. As part of this, the department must confirm what the overpaid employee should have been paid.
- Transferring funds to the appropriate budget upon repayment, if applicable.
University/ISC Responsibilities
As a state agency, the University of Washington is required by law to recover overpayment of funds regardless of when and why it occurred.
Washington State Constitution Article VIII, Section 5 has been cited by the State Auditor’s Office when alleging overpayments: “The credit of the state shall not, in any manner be given or loaned to, or in aid of, any individual, association, company or corporation.”
The Payroll Office is responsible for:
- Processing all overpayments of wages that departments identify, which includes:
- Processing the repayment option forms
- Making the appropriate corrections to earnings and recoverable taxes and deductions in Workday
- Preparing a net calculation, as needed
- Responding to questions that departments are not able to address.
- Ensuring that the University of Washington follows state policies and laws pertaining to the overpayment process. This may include following up with employees on failed payment arrangements through a series of letters and/or payroll deductions and/or collections referral as outlined in the RCW.
How to Correct an Overpayment
Repayment Options
Open/expand the appropriate menu for guidance.
If the overpayment was made to:
An ACTIVE employee who is not on leave...
Active employees can choose from the below repayment options. If the department or the employee is unsure which repayment option to choose, please contact the Payroll Office for guidance.
Please note that, in certain scenarios, repayment by check may be the only possible repayment option. (Example: active employees with very large overpayments in comparison to their current earnings.)
| Repayment Option |
Description |
Instructions |
| Paycheck Reversal |
It may be possible to reverse the employee’s paycheck. |
When the overpayment is discovered, contact the Payroll Office as soon as possible to determine if this an option. If so, overpayment paperwork would not need to be submitted to ISC Payroll. |
| Timesheet Correction |
Repaying the University via a correction to the employee’s timesheet. This option can be chosen if it has been less than 90 days from the date the timesheet was submitted, approved, and paid (30 days for Med Centers employees).
The department is responsible for:
- Ensuring corrections made to the employee’s timesheet are accurate.
- Verifying corrections to the earnings are reflected on their reports and budgets accordingly, including any calculations for premium time, if applicable.
|
Refer to the Correct Time Off User Guide for instructions on correcting the employee’s timesheet; overpayment paperwork does not need to be submitted to the Payroll Office. |
| Absence Correction |
If the overpayment resulted from late submission of unpaid time off, and the employee decides they would rather use paid time off to repay the University, the employee or department can make corrections to the absence record as long as these paid time off balances were available during the overpaid period(s).
The department is responsible for:
- Ensuring corrections made to the employee’s absence record are accurate.
- Verifying corrections to the earnings are reflected on their reports and budgets accordingly, including any calculations for premium time, if applicable.
|
Refer to the Correct Time Off User Guide for instructions on correcting the employee’s timesheet; overpayment paperwork does not need to be submitted to the Payroll Office. |
| Total Gross |
A one-time deduction of the gross overpayment from the employee’s wages. Once the overpaid earnings are corrected, taxes and appropriate deductions will automatically be adjusted.
If the employee chooses this repayment option but the amount of their next paycheck is less than the full amount needing to be repaid to the University, all available funds will be deducted from subsequent paychecks until the overpayment is fully repaid. |
Follow the Procedure for preparing and submitting overpayment paperwork to the Payroll Office. |
| Installment Deductions |
A repayment plan spread over multiple pay periods until the overpayment is fully repaid. The minimum payment is whichever is greater, $50.00 or 10% of the overpayment amount. (Example: an overpayment of $750.00 would have a minimum payment of $75.00.) Installment deductions are taken each pay period based on the employee’s installment plan until paid in full.
If the employee is experiencing financial difficulties or would like to discuss an alternate payment plan, please have them contact the Payroll Office.
In the event the employee leaves the University of Washington, the overpayment balance will be deducted from their final payroll payment or leave cashout. If an overpaid employee is terminating, their department must notify ISC Payroll as soon as they are aware of it.
If the overpayment balance is greater than the amount of the employee’s final paycheck, the remaining balance of the overpayment will need to be repaid via check. |
Follow the Procedure for preparing and submitting overpayment paperwork to the Payroll Office. |
| Time Off Taken |
Applying the employee’s current vacation and/or compensatory leave hours against their overpayment. This type of repayment will reflect in the employee’s leave balances only.
This option requires prior approval from the Payroll Office, and can only be used towards “REG” or equivalent hours. The department budget approver must also approve this repayment method as hours will be deducted directly from the balance available. This will NOT credit overpaid funds back to the department’s budget.
When considering this option, please note:
- Future Time Off accruals cannot be applied against a current overpayment.
- Sick leave hours cannot be used to repay an overpayment.
- The hours to be deducted from the annual leave hours would be equal to the overpaid hours.
|
Contact the Payroll Office to request approval to proceed with this option. |
Procedure
1. The employee’s department is to download and complete both:
2. The employee’s department is to send the employee the completed paperwork from step 1.
Can I email the documents to the employee?
In some situations, email is the best way to contact the employee; however, it should be done in addition to one of the two methods below (certified mail or delivered in person). An example would be when the employee is no longer in the US, but active communication is known to be maintained between the employee and their department via email.
3. The employee’s department is to obtain proof that the documentation in step 1 was delivered to the employee, per the following guidance:
- If the documents were delivered to the employee via Certified Mail with Return Receipt Service, valid proof of delivery is a copy from the US Postal Service of the Certified Mail Receipt and the signed Returned Receipt (green postcard).
- If the documents were delivered to the employee in person, valid proof of delivery is either the signed Notification from step 1 or a signed Acknowledgement Letter (Word doc), obtained from the employee within two business days. If the department does not have/is unable to obtain either signed document from the employee within two business days, please deliver the documents from step 1 to the employee via Certified Mail.
4. The employee’s department is to discuss and/or clarify the overpayment with the employee.
5. The employee’s department is to email the following to the Payroll Office:
- Subject: “Overpayment – [Employee Name], [EID]”
- Attach the completed Overpayment Worksheet from step 1 AND either:
- the completed and signed Notification of Payroll Overpayment form from step 1
-OR-
- proof of delivery from step 3, if the Notification of Payroll Overpayment form is not signed
If the employee has not responded or signed the appropriate paperwork within 30 days, please forward the Notification of Payroll Overpayment, the Overpayment Worksheet, and proof of delivery to the Payroll Office for further recovery efforts.
A TERMINATED employee -or- active employee ON LEAVE...
Employees who have separated from the University or are on a long-term leave of absence must repay the University via check.
When an overpayment is discovered, it may be possible to reverse the employee’s paycheck. Contact the Payroll Office as soon as possible to determine if this an option.
Procedure
1. The employee’s department is to download and complete both:
2. The employee’s department is to email the following to the Payroll Office:
- Subject: “Overpayment – [Employee Name], [EID]”
- Attach both the completed Overpayment Worksheet and Notification letter from step 1
3. The Payroll Office will send the Net Calculation Worksheet(s) to the department. Separated employees must repay a net amount, which is calculated by the Payroll Office. Recovery of deductions and taxes are governed by state and federal rules, and each overpaid pay period requires individual analysis.
4. Within two business days after receiving the Net Calculation Worksheet from the Payroll Office, the employee’s department is to send the following to the employee via Certified Mail with Return Receipt Service and regular USPS mail:
- the Net Calculation Worksheet(s)
-AND-
- the completed Notification of Payroll Overpayment for Terminated or On Leave Employees from step 1
Can I email the documents to the employee?
In some situations, email is the best way to contact the employee; however, it should be done in addition to one of the two methods below (certified mail or delivered in person). An example would be when the employee is no longer in the US, but active communication is known to be maintained between the employee and their department via email.
5. The employee’s department is to email one of the following proofs of delivery to the Payroll Office:
- the signed Notification letter from step 1
-OR-
- a signed Acknowledgement Letter (Word doc)
-OR-
- A copy from the US Postal Service of the Certified Mail Receipt and the signed Returned Receipt (green postcard).
- If choosing this option, please include the Employee Name and EID in your email to the Payroll Office.
6. The terminated or on leave employee is to send their repayment check(s) to the Payroll Office at this address:
University of Washington
Payroll Office
Box 359555
Seattle, WA 98195
7. Once the repayment has been made in full, the Payroll Office will make the necessary entries in Workday to credit the department’s budget, including earnings, deductions, taxes and contributions.
Repayment for Suspended Operations Make Up Time
Suspended operations missed work time does not qualify for an overpayment repayment option plan.
If an employee does not make-up the time within 90 days,* they must complete the Suspended Operations Overpayment form to account for the missed work time. The completed form should be sent as an attachment to HCM Operations.
In the event an employee terminates before their missed work time balance has been accounted for, remaining hours will be deducted from the employee’s final paycheck. If the final paycheck has already been processed, the normal overpayment process will be used to collect the balance due.
* Most employees have 90 days from the last day of Suspended Operations to make up any lost work hours. However, per their contract, SEIU 925 employees have 60 days.
Appeals Process
A series of state (RCW 49.48.200, RCW 49.48.210) and federal regulations govern the overpayment process.
Requests to appeal the overpayment must be submitted in writing to the department within 30 days of the overpayment notification. The department will conduct a review and respond to the appeal. The decision must be in writing and sent to the home address of the employee by certified mail, return receipt requested.
If the department receives notification of appeal of the overpayment, it must contact the Payroll Office immediately to prevent the account from being sent to collections while the overpayment is being disputed.
If the employee is unsatisfied with the decision, they can request an adjudicative proceeding within 28 calendar days of receipt of the department decision. UWHR and the Payroll Office will conduct adjudicative proceedings. If the employee has not responded within 28 calendar days to the resolution decision then the employee defaults and must pay the amount of the overpayment determined by the department and on the notification form (or the net amount as calculated by the Payroll Office if employee is terminated or on leave).
Classified staff must use the grievance procedures contained in their collective bargaining agreement to request an adjudication meeting.
Collections Process
When an employee has not responded to or signed the appropriate paperwork within 30 days from the notification date, the department is to send the following to the Payroll Office:
- Notification of Payroll Overpayment
- Worksheet
- Proof of Delivery
The Payroll Office will send out a pre-collection letter to an employee who has not made payments. If a response is again not received from the employee, the overpayment may be referred to an outside collections agency or may result in involuntary payroll deductions from the employee’s paycheck(s).
Overpayments placed for collections will be charged a fee (commission – current rate 35%) by the collection agency in addition to the overpayment amount due. Once the overpayment has been turned over to the collection agency, the Payroll Office will no longer accept direct payments from the employee; the employee will need to communicate solely with the collection agency.