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Overpayment Collection

 

Denver Public Schools

Payroll Under and/or Overpayment Collection Policy

 

 

While the Payroll Department strives to pay every employee correctly each payday, occasionally errors occur that result in an overpayment, or underpayment, of wages.  In the event an error happens, the following procedures will be followed.

 

1.   Payroll Technician will calculate the gross amount of either the amount due to the employee, or pay that is owed back to the district from the employee.  Calculation will be figured effective with the date of the error and retro to a maximum of two calendar years from the date of discovery of the error.

 

2.    Immediate notification to the employee and the Principal or Department Head will occur.

 

3.   In the event an error has occurred and the employee is due retroactive pay, the district will restore earnings on the employee’s next scheduled pay day.  Retroactive pay up to the effective date of the error, limited to two calendar years, will be added to the employee’s regular pay

 

4.  In the event the employee has been overpaid, the employee will be asked to reimburse the District in full the next regular payday through a payroll deduction.  If the payment cannot be collected in a single payday, the remainder will be collected on subsequent paydays. The gross amount of the overpayment will be calculated from the onset of the error through current date, but no more than two calendar years from the date of discovery.

 

    In the event the employee is unable to repay the entire amount the following payday and needs to be put on a payment plan, the following schedule will be used to institute a payroll deduction:

 

§  Overpayments $0-100 – A full deduction will be taken the next payday after the error has been detected.

 

§  Over $100 – 600 - $100 will be withheld each pay period until the overpayment is recovered.

 

§  Over $600  -  The overpayment will be collected in six equal installments if there are at least six pay periods remaining in the school year.

 

Repayment plans may not be extended beyond six months or beyond the end of the school year.  If the amount is over $600 and there are less than six pay periods remaining in the school year, repayment will be collected in equal installments over those remaining pay periods i.e. if there are four pay periods remaining in the school year when the overpayment is detected, the overpayment will be divided by four to determine the amount to be withheld.

 

5. Deductions to recover overpayments due to bookkeeping errors may be taken by the employer even if they reduce the employee’s current wage below the required minimum wage.  However, Denver Public Schools recognizes the potential economic hardship this would cause to an employee. Therefore, if the amount of overpayment equals to more than 15% of the employee’s annual gross salary, careful consideration will be made to extend the collection-back period to a reasonable period of time.  However, no pay-back arrangement will be extended beyond 3 consecutive calendar years. 

 

6. Employees are obligated to immediately report to the Payroll department any errors on their paycheck that resulted in an overpayment.

 

Questions about this policy may be directed to the Denver Public Schools Payroll Department at 720-423-3450.