Integrated Service Center

Overpayments

An overpayment occurs when you are paid for hours that you did not work or for which you were paid at an incorrect rate.

An overpayment can be reported by an employee or discovered by the employee’s department during a review of their payroll.

As a state agency, the University of Washington is required by law to recover these overpaid funds.

A series of state and federal regulations govern the overpayment process. To comply with these regulations, you are required to notify your department immediately if you discover an overpayment on your paycheck.

Direct Deposit/Check Reversals

The Payroll Office often receives overpayment notifications right after payroll has processed. If the overpayment is for the full amount of the direct deposit and within the window to reverse the funds, the Payroll Office will request a reversal from the bank rather than establish an overpayment repayment plan. If the overpayment is for a partial amount of the check, the Payroll Office requires approval from the employee prior to reversing the funds.
If the employee receives a paper check and the overpayment is for the full amount of the check, the Payroll Office will pull the check (if not already mailed) and cancel the pay results. If the pay if for a partial amount, the check may be pulled and reissued.

Repayment for Current Employees

Active employees have four repayment options to choose from:

  • Non-exempt employees may correct an overpayment with a correction to their timesheet, if less than 90 days from the date the timesheet was submitted, approved, and paid
  • Total Gross One-Time Repayment
  • Installment Deductions
  • Time Off Hours (using vacation and/or compensatory time)

An overview of the Overpayment process, including worksheets, instructions, and notifications is contained in the document linked below.

Download the Overpayment Process Overview (Word)

Repayment for  Separated (Terminated) Employees

Employees who have separated from the University or are on long-term leave must repay the University by check.

This requires a repayment calculation by the ISC Payroll team. An overpayment cannot be considered paid in full unless it is for the amount that has been calculated by the ISC.

An overview of the Overpayment process, including worksheets, instructions, and notifications is contained in the document linked below.

Download the Overpayment Process Overview (Word)

Collection Agency Accounts

Departments work with the ISC to ensure repayment of overpayments using the appropriate method listed above. When an employee does not sign the Overpayment Repayment Option Form, the department may refer the overpayment to the ISC for further action.

An employee has 20 days to respond to the initial Overpayment Notice Letter from their department. If there is no response to the initial notice, a pre-collection letter is sent at the end of the 20-day period. This letter will be sent from the ISC via certified mail to the home address on file.

If all prior attempts to secure payment arrangements have failed, the overpayment may be placed with an outside collection agency. Accounts referred for collection are charged a collection fee (commission) by the collection agency in addition to the overpayment amount due. Once an overpayment has been turned over to the collection agency, the ISC will no longer accept payments from the employee. The employee must communicate directly with the collection agency.

Rules and Regulations

IRS Publication 525 has information regarding salary overpayments and prior tax year.

For the relevant section from the Revised Code of Washington, click the link below.

R.C.W. 49.48.200

R.C.W. 49.48.210