An overcompensated employee must meet with the Payroll Department to arrange repayment. Consideration may be made for the amount of overcompensation, certain statutory deductions (FICA, retirement, others), the date of occurrence, and other circumstances in establishing repayment terms. The final decision must ultimately safeguard the interest of the University. An employee may be asked to complete a payroll deduction form, and an employee’s willful attempt to avoid repayment of an overpayment may result in negative employment action.
If an employee who has been overpaid is separating from the University, the amount of the overpayment will be withheld from the employee’s final paycheck. If the final paycheck is insufficient to cover an amount due the university, the employee must make other payment arrangements. The employee will be extended an opportunity to discuss and present evidence regarding any deduction prior to an amount being withheld.
While the Fair Labor Standards Act permits the deduction of overpayments without the employee’s consent, the term overpayment does not include other losses, such as damage to University property caused by the employee. The FLSA permits deductions from nonexempt employees to the extent that such deductions do not result in the employee’s pay being less than the minimum wage or overtime requirements. Deductions, other than for overpayments, may not be made to exempt employees except for the specifically identified exceptions listed in 29 CFR 541.602.