Effective Date: 5/1/2021
Responsible Party: Payroll Department; Sherice McCarthy-Hill, Director
Scope and Audience: This policy applies to all employees, including student employees.
Policy Purpose: To establish the process for identifying and resolving compensation overpayments to employees.
Policy Statement: Dartmouth College is committed to making timely and accurate compensation payments to its employees. However, due to errors in processing, timeliness of submission, or reporting an employee may occasionally be paid more than is owed. This policy outlines the procedures for resolving compensation overpayments. Employees, supervisors, departments, Finance Centers and Human Resources have the responsibility to prevent and report any overpayments over $50 immediately to the Payroll Department, regardless of the cause of the overpayment.
Process for Current Employees
Current Calendar Year
Payroll is notified of an overpayment. The Lead Payroll Administrator will then:
1. Confirm/Calculate the amount of the employee’s overpayment.
2. Notify the employee of the overpayment and repayment plan options based on overpayment amount (All repayments are subject to NH Title XXIII law (Section 275:48:ii) which states: “The amount to be deducted, which shall be agreed upon by the employer and the employee but which shall, in no event, be more than 20 percent of the employee's gross pay in any pay period.”
3. Manage the recovery process and setup appropriate Salary Adjustment element. Employee’s gross taxable wages will be reduced in addition to associated taxes for that calendar year, ensuring that the year-end W-2 Form is correct.
4. Communicate with employee when the repayment obligation has been fulfilled.
Prior Calendar Year(s)
The wages paid in error in the prior year remain taxable to the employee for that year because the employee received and had use of those funds during that calendar year. The employee is not entitled to file an amended tax return for that year.
Payroll is notified of an overpayment. The Lead Payroll Administrator will then:
1. Confirm/Calculate the amount of the employee’s overpayment.
2. Notify the employee of the overpayment and repayment plan options based on overpayment amount (All repayments are subject to NH Title XXIII law (Section 275:48:ii) which states: "The amount to be deducted, which shall be agreed upon by the employer and the employee but which shall, in no event, be more than 20 percent of the employee's gross pay in any pay period.”
3. Manage the recovery process and setup appropriate Salary Adjustment element. Employee’s gross taxable wages will be reduced in addition to associated taxes for that calendar year, ensuring that the year-end W-2 Form is correct.
4. Communicate with employee when the repayment obligation has been fulfilled. The salary adjustment for the current year will offset the overpayment within the previous year.
Process for Terminated Employees
Payroll is notified of an overpayment. The Lead Payroll Administrator will then:
1. Confirm/Calculate the amount of the employee’s overpayment.
2. Notify the employee of the overpayment and repayment plan options based on overpayment amount.
a. Overpayments terminated employees are collected at Net.
b. Repayment is made via personal check made payable to “Trustees of Dartmouth College”.
c. Payments are made to Payroll who will work with the Cashier’s office to deposit the funds and credit the employee overpayment.
d. Communicate with employee when the repayment obligation has been fulfilled.
