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Overview: The overpayment of wages can occur in any payroll department. The reason an overpayment happens can be as varied as the employees themselves and should be avoided at all costs.

But if an overpayment does occur payroll must be sure that the recouping of the overpayment follows the strict guidelines set forth on both the federal and state levels. The Internal Revenue Service and the federal Department of Labor have strict regulations on when and how an overpayment can be recouped. And that is just the beginning. Most state Departments of Labor and Taxation Agencies have similar strict guidelines that apply to taking back overpayments from employees. In fact, in a few states it is actually illegal to try and recoup an overpayment all together, while others states give a very short time frame for this purpose.

Why should you attend: Mistakes can be made on an employee’s paycheck in the most well managed payroll department. Underpayments of course, are not difficult to resolve. However, correcting errors involving overpayment of wages can be quite different! Multitudes of questions arise regarding what is required of the employer under IRS regulations. But recouping overpayments are not just governed by IRS tax laws. Wage and hour law compliance must also be honored when dealing with overpayments. Issues such as exempt employee status, minimum wage and overtime rules for nonexempt employees must be considered when recovering overpayments from employees. And of course, individual states have their own compliance issues involving state tax code and/or wage and hour laws! What do you need to watch out for on the state level when creating a collection of overpayment of wages policy?

Areas Covered in the Session:

• Handling Overpayments under IRS and State Tax Codes:
  • Why a 1990 IRS Private Letter Ruling on handling overpayments applies today
  • Correcting overpayments in the same calendar tax year
  • Why asking for the gross is better than the net check for prior year overpayments
  • Correcting FICA taxes for a prior year overpayment
  • Correcting FUTA/SUI taxes
  • Using Form W-2 or Form W-2c to report overpayment
• Wage and Hour Laws and Their Impact on Recouping Overpayments
  • The standards under the FLSA in terms of timeframe for recouping prior year overpayments
  • Is a written agreement for repayment always required under the FLSA
  • Collecting overpayments from exempt employees and its effect on salary basis compliance
  • Recouping overpayments and its effect on minimum wage and overtime requirements
  • Can employers treat advanced vacation payments as overpayments if an employee terminates
  • Where do the states stand on recouping overpayments

Who Will Benefit:

• Payroll professionals
• Human Resources
• Accounting Personnel
• Business Owners
• Lawmakers
• Attorneys