How To: Adjust for Employee Overpayment

Who does this?  Stanford Payroll Administrators

When?  Employee overpayments are identified.

How?  By reducing future paychecks or by requesting a repayment check from the employee

 

 

Adjust for Employee Overpayment (6 steps)

step 1

Report the overpayment to Payroll by submitting a HelpSU ticket:

  1. Click https://helpsu.stanford.edu/helpsu/3.0/helpsu-form?pcat=Payroll.
  2. In the Request Description field, include the following details about the overpayment:
    • Employee ID
    • Employee Name
    • Overpayment Amount
    • Pay Period(s) when Overpayment Occurred
step 2

If the overpayment was made by check:

  1. Attempt to retrieve the check from the employee.
  2. Return the check to Payroll for cancellation.
  3. Request an Off-Cycle Check if pay is due to the employee. Reference How To: Request Off-Cycle Check.
step 3

If the overpayment was made by direct deposit:

  1. Payroll will attempt to recall the direct deposit if the overpayment is discovered within three business days of payday.
  2. Payroll will confirm with you if the direct deposit is successfully recalled.
  3. Request an Off-Cycle Check if pay is due to the employee. Reference How To: Request Off-Cycle Check.
step 4

If the overpayment cannot be recovered by either of the above methods:

  1. Reduce the employee's next regular paycheck by the gross amount of the overpayment, see step 5.

    2. ~ OR ~
  2. Request a check repayment from the employee, see step 6.
step 5

To reduce the employee's next regular paycheck:

  1. Download and print the One-Time Payment Form.
  2. Complete the Reduce Pay section of the form.
  3. Submit the form to Payroll by 5pm on the last day of the current pay period.
Note:  If the overpayment is large, the reduction can take place over 1-3 pay periods. Submit a separate One-Time Payment Form for each pay period. Any exceptions to this timeframe must be approved by the department and the Payroll Director and are subject to a $20/pay period adminstrative fee.
step 6

To request a check repayment from the employee:

  1. Payroll will calculate the net amount due.
  2. Ask the employee to write a check payable to Stanford University.
  3. Send the check to Payroll with a memo indicating the relevant employee ID number and the PTA to be credited.
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What Happens Next?

  • Payroll applies repaid funds to the PTA originally charged.
  • Payroll will continue to follow up with departments on outstanding overpayments until the repayment has been received. It is an exception to policy to forgive an overpayment.

Additional Information

  • Overpayments cannot be maintained on grants or sponsored projects. If a pending overpayment is on a grant or sponsored project, enter a Labor Distribution Adjustment to move the overpayment to an unrestricted PTA. Reference How To: Create Salary Distribution Adjustment in LD.

Questions?

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