Guidance Document for Overpayments and Other Employee Debt

Transcription

1 Guidance Document for Overpayments and Other Employee Debt 1

2 Table of Contents 1. Introduction Roles and Responsibilities Budget Holders and Line Managers Completion of ESR Manager Self Service/Workforce Notifications Employees Recovery Process for overpayments of salary Gross Overpayments of Salary Gross Overpayments recovery policy Leavers Returning Members of Staff Money owing to the employee Salary Sacrifice Schemes Bank staff Net overpayments Other Staff Debt Repayment Authorisation Levels Reporting Employee Debt Summary Employee Debt Detailed Update Contacts Appendix 1 LCFT Instalment Request Form Appendix 2 - Overpayments Flowchart

3 1. Introduction This procedural guidance should be read in conjunction with Policy FIN007, Policy for the Recovery of Employee Overpayments and Debt. It has been produced to support Trust staff in aiming to prevent overpayments to staff and to provide guidance with regards to roles and responsibilities when overpayments/employee debt arises. 2. Roles and Responsibilities 2.1 Budget Holders and Line Managers Completion of ESR Manager Self Service/Workforce Notifications The primary reason for employees being overpaid is because ESR and/or workforce notifications have not been completed in a timely manner. Guidance information concerning the process for the completion of ESR and Workforce Notifications is accessible through the intranet. Budget holders will be held accountable for failure to follow ESR procedures which result in overpayments of salary. Budget holders are responsible for ensuring that ESR is updated immediately when any changes occur which will affect staff pay. Where these tasks have been delegated to others, for example line managers or supervisors, then adequate provision must be made for training. However, whilst the authority to act may be delegated ultimate responsibility remains with the budget holder. If, for any reason, the manager cannot access ESR, then a Workforce Notification form should be completed and details of the change notified to payroll by (see contact details). Where an employee fails to provide a Statement of Fitness for Work ( Fit note ), and a decision has been made to withhold sick pay, managers must ensure that payroll are directly notified. Where an employee is summarily dismissed i.e. their employment is terminated without notice, for example, due to gross misconduct, - or if an employee is terminated in lieu of notice, it may not be possible to process the termination prior to the Payroll cut-off date. In such cases, the Payroll Department must be contacted by the line manager, to explore the possibility of avoiding any overpayment. 3

4 2.2 Employees Employees must check their payslips and or bank statements. If an employee discovers any discrepancy with their pay, they must notify payroll immediately. Failure to notify payroll of an overpayment could result in disciplinary proceedings and referral to the Local Counter-Fraud Specialist, which may result in legal action. Failure to check net pay will not be an excusable reason where disciplinary action is taken against an employee. Employees are rarely at fault when overpayments occur. However, this is not an acceptable reason for disputing an overpayment and recovery will proceed as outlined below, in all circumstances, regardless of who is to blame. 3 Recovery Process for overpayments of salary Overpayments to staff are split into two different categories, Gross overpayments and Net overpayments. 3.1 Gross Overpayments of Salary Where the member of staff is still employed by the Trust, the overpayment is recovered from Gross salary (i.e. before tax, NI and pension contributions). As a general rule an invoice will not be sent to the member of staff for a Gross overpayment. Exceptions to this would be for reasons such as maternity leave or long term sick. In these cases the overpayment will be calculated as a Net debt and instruction sent to Finance for raising an invoice. On discovery of a Gross overpayment, payroll will contact the member of staff notifying them of the overpayment and detailing how it will be recovered Gross Overpayments recovery policy The Trusts auditors and NHS Protect have advised that in common with best practice recovery of an overpayment should not exceed the period over which the overpayment occurred. The Trust s Overpayments Policy supports this and only in cases where normal recovery would cause genuine hardship will extended repayment terms be considered. Trust standard policy on repayment is detailed below: Overpayment Occurrence Overpayment relating to the month just paid Policy to be applied Where the overpayment is identified and notified to the employee within 7 calendar days of the payment being made, recovery will be in full from the following month s salary. Where the overpayment is identified and notified to the employee after this time, recovery will be from the second month s payroll (unless the employee agrees that it can be recovered sooner or agrees an alternative repayment method). 4

5 Overpayment Occurrence Overpayments relating to a period prior to the last month paid or that have occurred over a period of more than one month Policy to be applied Recovery should be sought in full from the next salary payment initially. However, where this may cause financial hardship, Payroll Managers have the authority to agree to the amount being recovered over a period of up to 3 months or over the period the overpayment accrued. Where an employee has genuine cause to dispute the overpayment, they must inform payroll immediately on receipt of notification, who will suspend recovery whilst the matter is investigated by payroll, and escalate as needed. Where the employee disputes the affordability (but not the liability) and repayments cannot be agreed within payroll allowed timescales, then the employee must complete a Request for Instalments form, Appendix 1. This will be forwarded to Finance who will decide if payments offered are acceptable given the values concerned and affordability relevant to the staff members overall salary. Finance may contact the employee, or their line manager, for further details. If agreement cannot be reached, then Finance will authorise the Payroll Department to undertake suitable deductions from the employee s salary in order to recover the overpayment. The employee must then raise a grievance, to be heard within their Network, should they not agree with the amount of the deductions. 3.2 Leavers All monies owing will be recovered from the employee s final salary in full. Where the final salary is insufficient to cover the overpayment, a debt notification for the balance of the overpayment, will be sent to Finance who will raise an invoice and make the repayment arrangements with the employee. This will be over the same terms previously agreed. 3.3 Returning Members of Staff If a previous member of staff returns to work for the Trust and they are found to have an overpayment from a previous post, then this overpayment will be recovered by deductions from their salary in-line with this guidance. 3.4 Money owing to the employee In instances where the employee is owed money such as in salary arrears or overtime it is expected that these payments will be off-set against any overpayment. 3.5 Salary Sacrifice Schemes Members of staff, who have entered into repayment plans based on affordability, will not be allowed to participate in any salary sacrifice until their debt is cleared. 5

6 3.6 Bank staff If the employee has been overpaid on their bank post but they have a substantive post, then recovery of the overpayment will be made against their substantive post. If staff have terminated a substantive post but they are still receiving payments from a bank post, then recovery of the overpayment will be made against their bank post. Recovery terms will follow the same guidance as detailed above. 3.7 Net overpayments These occur when a member of staff is no longer employed by the Trust. Net over payments are usually discovered following the late receipt of a termination form. In these instances payroll will complete a Debt Notification and letter, to the member of staff, detailing the overpayment. These will be ed to Finance, who will raise an invoice to be issued to the former staff member along with a copy of the letter. The debt will then be treated as a civil debt which, if not paid or terms agreed, will be recovered through the Trusts standard debt recovery procedures which do include civil court action. 4 Other Staff Debt Other staff debt usually arises from the car lease scheme, car salary sacrifice scheme and other salary sacrifice schemes. This debt is classed as standard commercial debt and will be recovered in full as it arises. In exceptional circumstances, payments by instalments may be considered for larger debts, such as early termination of vehicle lease contracts occuring under unusual/unavoidable circumstances. To assist staff with repayments, employees have the option of repaying commercial debts by credit card (see contact details). If staff need to query the validity of a lease or salary sacrifice debt, please contact GMP Drivercare (number in contacts section). 5 Repayment Authorisation Levels The following authorisation limits apply to the agreement of debt repayment plans based on affordability. Debt value up to 5,000 Debt Value in excess of 5,000 Principal Finance Manager Financial Services Director 6

7 6 Reporting This section highlights the regular reports that will be produced by the Finance team, for whom and the frequency. Report Title Produced for Frequency Employee Debt Summary Chief Finance Officer Quarterly Employee Debt Summary Audit Committee and EMT Quarterly Employee Debt Detailed Update Finance and HR Managers Monthly 6.1 Employee Debt Summary This will highlight the additional debts arising each quarter and provide a summary of a amounts collected and outstanding from current and previous financial years. This will also highlight all budget holders who have three or more occurrences within their area of authority during a financial year. 6.2 Employee Debt Detailed Update This report will provide detail of all new employee debt arising in the previous month and detail the original debt, and the amounts owed and collected from each individual. It will be used as the source for the debt summary report. 7 Contacts Contact name address Telephone Finance (debtors & Lct.financeacctsReceivable@lancashirecare.nhs.uk credit control) Finance credit or debit card payments or Payroll all payroll@lthtr.nhs.uk enquiries Workforce hrqueries@lancashirecare.nhs.uk GMP Drivercare Lease cars: info@gmpdrivercare.co.uk Salary Sacrifice: salarysacrificeorders@gmpdrivercare.co.uk

8 8 Appendix 1 LCFT Instalment Request Form Please return this form within 10 working days to: lct-far@lancashirecare.nhs.uk Your Name: Are you a current LCFT Employee? Y/N If Yes go to Q1, if No go to Q2. Service/Department or Bank that you work for Current salary band Payroll (Assignment) number Current Employees, please note: If you leave the Trust, the balance of any monies owing will be deducted from your final salary. Failure to return this form within the given time, or to provide any further information requested, may result in the money owed being deducted from your salary, in full or at a rate determined by the Trust Your National Insurance (NI) number Contact Details: Address Tel Number Mobile Number Address Amount of money owed Proposed repayment plan: over = Months Reason for instalments: please explain briefly why you need to repay the amount owed in extended instalments How will you repay the debt: Please mark with an X Via Salary deductions (LCFT employees only) Via credit/debit card Please call /345 8

9 Q7 Via bank transfer/standing When do you propose to commence repayments other Bank details overleaf Please provide details Signature: If sending electronically please type name And add sent via . Please note, if you fail to adhere to the agreed repayments, the plan will be cancelled and the full balance of money owing will become due. This could result in further action being taken against you, which may include court proceedings. If you cannot make a payment you must contact our credit controller on If a suitable repayment plan cannot be agreed, the matter will be escalated to senior management, who may require you to complete a detailed income & expenditure statement. For Finance Use Only Customer Account Reference Invoice number/s Period of time debt accrued The debt is in relation to: (please attach relevant invoice, payroll notification or advice note) Salary overpayment Lease car Salary sacrifice car other Please provide any other relevant information Agreed repayment if different from proposal: Per month Over: months Agreed by Signature Name Date Forms for invoiced debt to be returned to: Lcft-far@lancahirecare.nhs.uk Forms for Gross or Car Lease debt to be returned to: Fs-assurance@lancashirecare.nhs.uk Trust bank details for direct payments: Sort Code: Account Number: please quote your name/invoice number. 9

10 9 Appendix 2 - Overpayments Flowchart 10