Administrative procedure for overpayments

Purpose

Ensure the accurate and timely recovery of any amounts overpaid to employees through the Payroll system, whether active or terminated.


Scope

This administrative procedure applies to all employees who received or are receiving payments through the Payroll system for which an overpayment was processed through error or omissions. This procedure applies to all funds including research grants.

Note: Outstanding balances for benefits that remain unpaid after a leave will be treated in the same manner as if it were an overpayment.


Procedure

If an employee has been overpaid by a unit/department through either an error or delayed processing, the unit/department is obligated to seek reimbursement from the individual with the assistance of Human Resources. If the error is the result of processing within Human Resources, Human Resources will manage the recovery of the funds.  

Former employees who were overpaid at the time they left the University and have not yet reimbursed the University shall not be re-hired.

Employees who remain employed by the University will have overpayments recovered from future payments unless they pay the amount in full through other means agreed upon with the University Payroll office.


Overpayment Recovery Procedures

Active Employees

  • Once an overpayment is discovered, Payroll will calculate the amount of the overpayment and notify the unit/department.
     
  • Payroll will send a letter informing the employee of the cause of the overpayment and the gross and net amounts due. The unit/department contact will be identified in the letter to handle questions from the employee.
     
  • The employee will be given the choice of providing a personal cheque for the full net amount or having payroll deductions for the gross amount from their pay cheques. All payroll deductions must be completed within the same taxation year.
     
  • Should Human Resources not receive a repayment agreement or a personal cheque for the amount owing within two weeks of the notification, Payroll deductions will commence automatically

Note: Term or contract employees coming up for renewal will not be re-appointed without a signed repayment agreement in place.

Employees on leave

  • Once an overpayment is discovered, Payroll will calculate the amount of the overpayment and notify the unit/department.
     
  • Employees on an unpaid leave will receive a request for reimbursement similar to terminated employees.
     
  • Payroll will send a letter informing the employee of the reason for the overpayment and the gross and net amounts due.  The unit/department contact will be identified in the letter to handle questions from the employee.
     
  • The employee will be given the choice of providing a personal cheque for the full net amount or having payroll deductions for the gross amount taken from their pay cheques upon their return. If the return is in the next taxation year, a taxable benefit noticewill be issued for the gross amount owing and the balance will remain owing until cleared.
     
  • Should they not return to the University, the full gross amount will be deducted from any vacation pay or other payments being issued at termination of employment.  If there is no final payment or it is inadequate to cover the amount owing, the procedures for terminated employees will be enacted.
     
  • Employees who were overpaid at the start of their maternity leave will have the amounts deducted automatically from their first top-up payments.  Should an overpayment occur during a maternity leave when in receipt of top-up payments, the gross and net amounts owing will be calculated and the employee will be contacted either via email or letter sent to their home address. The employee will be given the choice of providing a personal cheque for the full net amount or having payroll deductions for the gross amount from their pay cheques upon their return or having the amounts owing deducted from any outstanding vacation payout as they make the switch to Extended Parental leave. Should the overpayment remain outstanding, they will be issued a taxable benefit notice for the amount owing.  Should they not return the terminated employee procedures will be enacted.

Terminated Employees

  • Employees who have left the University and were overpaid will be asked to provide the University with a personal cheque or a series of personal cheques equal to the amount of the overpayment. If it is not repaid within the taxation year, they will receive a taxable benefit equal to the full gross amount owing.
     
  • Payroll will send a letter informing the employee of the overpayment with the gross and the net amounts due.
     
  • Should the former employee not respond or make an attempt at reimbursement, a taxable benefit notice will be issued for the full amount. If no payment is received within six weeks of the initial contact, a second notice will be sent. If still no response within a further four weeks, the file will be turned over for collection.
     
  • No former employee, including academics, may be rehired if there are any outstanding balances owing on their payroll file. Only once a written agreement for repayment is received can they be rehired. Payroll deductions will begin on their first cheque. If they are on a Nil Salary appointment, a certified cheque reimbursing the University in full will be required before they can be reappointed. 

Effective January 1, 2015