Salary Overpayments

• Incorrect timekeeping or lack of supervision over employee hours worked.
• Failure to adjust after change in job assignment or employment separation.
• Incorrect pay rate, gross pay or miscalculation of overtime hours.
• Payment of scheduled hours vs. actual hours worked.
• Erroneous refunds.
• Under-withheld voluntary or involuntary deductions and/or miscellaneous deductions.
• Under-withheld FICA and Social Security insurance programs.

Campus divisions and departments are responsible to ensure timely submission of personnel action forms and leave records. Departments must communicate hiring recommendations, terminations, leaves of absence, pay rate changes, and other relevant information promptly to prevent wage overpayments.

All salary overpayments should be immediately reported to the Payroll Shared Services Center by completing the overpayment form with submission to payrollssc@northcarolina.edu.

Until the overpayment is repaid in full, the expense remains on departmental funds, to include any unrecoverable benefits and taxes.

Overpayments that occurred under a grant salary line may require the department to identify discretionary funds to repay the grant until the full repayment of the overpayment is received. The Payroll SHared Services Center does not locate funds or assume the responsibility to make the grant whole prior to the full repayment of the overpayment.

In accordance to North Carolina General Status 95-25.8(a)(1) and (d), an employer does not have to have written authorization from the employee if the deduction is for purposes of correcting a prior overpayment of wages or repayment of a wage advance or a loan.

The employee is responsible for the gross overpayment amount. The employee is also responsible for repaying applicable benefit deductions. If the employee has closed a retirement account before the amounts over-deposited have been reclaimed, these amounts (including any employer contributions overpaid) must be repaid by the employee.

If amounts deducted for benefits or other purposes have already been remitted to the vendor and cannot be recovered from the payee/carrier, the amount must be repaid by the employee.

Active employees with current salaries: Active employees who receive an overpayment are considered to be in receipt of prepaid wages. The Payroll Shared Services Center will, by default, set up payroll deductions to recover the overpaid amount.

Terminated employees and those with insufficient salary for payroll deduction must contact the Payroll Shared Services Center for available repayment options. Additionally, the collection process for debt not repaid within the allotted timeframe will be discussed, up to reporting to the North Carolina Attorney General’s Office and the North Carolina Department of Revenue.

Once full repayment is received, the funds are returned to the department, and any applicable updates are made to the employee’s gross pay, taxes, deductions, and benefit records. Exceptions apply due to limitations and other factors that may be discovered during the overpayment analysis process. In some instances where FICA and Social Security taxes apply, an amended Form W-2 may be needed. This decision is determined in consultation with the UNC System Shared Services.