ULSTER UNIVERSITY PAYROLL DISCREPANCY POLICY

Transcription

1 ULSTER UNIVERSITY PAYROLL DISCREPANCY POLICY 1

2 DOCUMENT CONTROL Document Title Document Version Author: Custodian Approving Committee Policy for the resolution of overpayment and underpayment of salary or any other payments made via the payroll. (Payroll Discrepancy Policy) V2 Financial Accountant Financial Accountant CFO / Director of Human Resources Policy approved date 6 September 2017 Policy effective from date 6 September 2017 Policy review date September 2018 Changes from previous version: Document updated for Job Titles and financial limits where approval is required by CFO. 2

3 ULSTER UNIVERSITY POLICY FOR THE RESOLUTION OF OVERPAYMENT AND UNDERPAYMENT OF SALARY OR ANY OTHER PAYMENTS MADE VIA PAYROLL ( PAYROLL DISCREPANCY POLICY ) 1.0 EXECUTIVE SUMMARY The University is required to ensure that employees are paid correctly at all times. If an overpayment of salary occurs for any reason, the University will recover the overpayment from the employee. Similarly the University will take steps to correct any underpayment of salary or any other payment to which an employee is entitled. If an overpayment is considered to have been brought about fraudulently then the matter will be reported to the University s Fraud Specialist via the office of the Chief Finance Officer for investigation to be carried out under the University s Theft Fraud and Corruption Policy and Response Plan. 2.0 SCOPE OF POLICY This procedure applies to all employees of the University. 3.0 BACKGROUND The purpose of this policy is to ensure that the action taken when dealing with such matters is consistent throughout the University. 4.0 RESPONSIBILITIES 4.1 The Chief Finance Officer (CFO) is required to authorise any losses arising from the overpayment of salaries greater than the amount of 1, The Director of Human Resources is responsible for ensuring that appropriate systems exist for ensuring that all staff who are subject to Payroll Discrepancies are dealt with in a fair and equitable manner and in accordance with current employment legislation and good practice. 4.3 He/She also has responsibility for ensuring that the systems described in 4.2 above are designed, updated, monitored and audited to ensure compliance. 4.4 The Financial Accountant has the responsibility for ensuring that once overpayments are highlighted they are communicated to the Department of Human Resources and University employees in a timely manner. 4.5 The Financial Accountant is responsible for recording all salary overpayments and monitoring collection of these amounts. 4.6 Human Resources Personnel who undertake to resolve Payroll discrepancies must ensure that they understand and follow this policy and revert to the Finance Department for advice, if required. 4.7 Cost Centre Managers/Budget holders have a duty to review all salaries and wages charged to their cost centre. 3

4 4.8 The University s Fraud Specialist, as appointed by the CFO will investigate all overpayments that may be considered fraudulent. 4.9 All Employees have responsibility to remain aware of their position and obligations under the Payroll Discrepancy Policy. 5.0 POLICY DEVELOPMENT Due regard has been given to relevant practice and employment law issues in particular the Employments Rights Act PAYROLL DISCREPANCIES 6.1 FAILURE TO DISCLOSE A SALARY OVERPAYMENT OR ANY OTHER PAYMENT FOR EMPLOYEES All employees have a responsibility for checking each payslip they receive and to advise their Line Manager, the Payroll Office or the Department of Human Resources if they have been overpaid by any amount. Failure to do so may result in disciplinary action and referral to the University s CFO if the employee was aware of an overpayment but failed to report it. The CFO will decide whether to carry out an investigation that may culminate in criminal proceedings and/or disciplinary action being commenced/taken against an employee in the event of a failure to disclose an overpayment. If employees chose to advise their Line Managers, the Line Manager s responsibility ends once they have reported it to the Department of Human Resources and received acknowledgment. In addition, Budget Holders/Cost Centre Managers have a duty to review all salaries and wages charged to their cost centre and query any unusual items or unexplained variances with the Department of Human Resources, the Payroll Office and/or the management accountants. 6.2 OVERPAYMENT OF SALARY OR ANY OTHER PAYMENTS FOR EMPLOYEES After an overpayment of salary has occurred, the employee will be provided with written notice of the background to the overpayment, the amount, how immediate payment can be made and the planned reversal (Appendix A). The employee s address used will be the last known home address held on the Electronic Staff Record System and it is the employee s responsibility to ensure that this is correct. If the date of the written notification is prior to the 15th of the month the reversal will automatically occur in the following month s payroll (i.e. the reversal for an overpayment detailed in a letter dated the 10th of January will be reversed in the February pay run). If an employee considers that due to exceptional circumstances the timing of the reversal is not possible (i.e. that it will cause financial hardship or they dispute the overpayment), they have the responsibility to contact the Department of Human Resources before the 5th of the following month to suspend the reversal of the overpayment until a mutual repayment plan is agreed as detailed in section 6.3 herein. 4

5 If the date of the written notification is between the 16th and the 31st of the month the reversal will automatically occur in the second month s payroll (i.e. the reversal for an overpayment detailed in a letter dated the 20th of January will be reversed in the March pay run). If an employee considers that due to exceptional circumstances the timing of the reversal is not possible (i.e. that it will cause financial hardship or they dispute the overpayment), they have the responsibility to contact the Department of Human Resources before the 5th of the second month to suspend the reversal of the overpayment until a mutual repayment plan is agreed as detailed in section 6.3 herein. Date of letter from Payroll Before the 15th of the month After the 16th of the month Date employee can suspend the automatic reversal (see Section 6.3) The 5th of the month after the date of the date of the letter from Payroll The 5th of the second month after the date of the letter from Payroll Automated reversal of overpayment The month after the date of the letter from Payroll The second month after the date of the letter from Payroll In cases where the automatic correction causes the employee s net pay to reduce by over 25% of the previous month s net pay, the automatic reversal will be limited to 25% of the previous month s net pay (excluding any adjustments). For example, if you were paid 1,000 net in January, the maximum automatic reversal payment would be 250 in subsequent months. Repayments will continue each month until the overpayment is repaid in full. All overpayments are to be advised to the Financial Accountant who will check that overpayments in respect of employees who have left the University have been raised in University s debtor ledger. For employees who are still employed by the University, the Financial Accountant will ensure that the overpayments are transferred from the Cost Centre expenditure accounts to a Salary Overpayments balance sheet account, which will be monitored by the Financial Accountant. 6.3 EXTENDED REPAYMENT OF A SALARY OVERPAYMENT OR ANY OTHER PAYMENT Further to the automated recovery of overpayments detailed in section 6.2, if an employee considers that due to exceptional circumstances the timing of the reversal is not possible (i.e. that it will cause financial hardship or they dispute the overpayment), they have the responsibility to contact the Department of Human Resources and agree a repayment plan. If no immediate agreement can be made the following procedure will apply: (i) it is the responsibility of the employee to complete a Means Statement provided by the Department of Human Resources and an Overpayment Loan Form (Appendix B) before the 5th of the month to suspend the automatic recovery and to ensure that it is received by the Department of Human Resources who will forward this to the Financial Accountant. 5

6 (ii) The Department of Human Resources will provide details of a location, date and time for a meeting to take place with the employee providing 10 days notice allowing the employee the opportunity to be represented. Any employee has a right to be accompanied by a companion. The companion may be a fellow University employee or an official employed by a recognised trade union. The Financial Accountant will also attend this meeting. (iii) Reasonable adjustments will be made to cater for employees being dealt with under this procedure who have a disability (for example due regard to accessibility of venue, timing of meetings, full oral explanations to aid the understanding at each stage taking into account any learning disabilities, etc). (iv) The employee will provide the Department of Human Resources with any supporting information for the Means Statement, i.e. bank statements, rates bill, utility bills etc. within 10 days of request. (v) Failure to attend the meeting or any subsequently re-arranged meeting without good reason may result in the meeting being held in the employee s absence based upon the evidence available. In these circumstances, any decision made will be notified in writing to the employee within five working days of the meeting. Should the employee provide notice that they need to re-arrange the meeting, they have the opportunity to provide a convenient location, date and time within 21 days of the original meeting. (vi) The Department of Human Resources has the right to discuss the overpayment with the employee s Line Manager and / or any other person within the University as appropriate. (vii) Overpayment loans will be granted on a case-by-case basis in order to recover the overpayment as quickly as possible and generally within six months by equal instalments. A copy of the agreed repayment schedule will be held on the Staff Personal file within the Department of Human Resources. (viii) In the event that an overpayment or the terms of overpayment loan are disputed, then the overpayment will be reviewed by the Director of Human Resources and/or the University s CFO. They will agree whether the repayment should be made in full or the terms of an overpayment loan. In accordance with the Employment Rights Act 1996, no consent is deemed required to recover overpayments of Payroll payments. The outcome of the meeting will be advised to the employee within five working days of this meeting. All overpayment loans and repayment terms require the approval as detailed in the table below prior to being communicated to the employee. No Overpayment Loan Form is required if repayment terms are either mutually agreed between the Department of Human Resources and the employee in line with the table below or the repayment plan is enforced as detailed in the paragraph above. All overpayment loans are to be advised to the Financial Accountant who will record and monitor the overpayments as detailed in 6.2. A spreadsheet detailing the 6

7 overpayment loans is maintained by the Department of Human Resources and submitted to the Financial Accountant on a monthly basis. Term Approvers 0-6 months Human Resources Advisor (Band 6 or higher) or any senior approver detailed herein 6 12 months Human Resources Advisor (Band 6 or higher) or any senior approver detailed herein and the Director of Human Resources or the University s CFO months Human Resources Advisor (Band 6 or higher) or any senior approver detailed herein and the Director of Human Resources or the University s CFO Director of Human Resources and/or the CFO months 60 months + Resources Committee (ix) If during the period of repayment of an overpayment loan the employee s contract terminates, the final balance will be deducted from their last salary payment. If there is a shortfall the residual sum will be subject to 6.4 herein. If during the period of repayment of an overpayment loan the employee s salary is affected by maternity leave, half pay due to sickness absence or no pay for any other reason, then the overpayment loan may be renegotiated subject to repeating the process detailed above. 6.4 OVERPAYMENT OF SALARY OR ANY OTHER PAYMENTS FOR EMPLOYEES WHO HAVE LEFT THE UNIVERSITY The CFO will be advised as soon as the overpayment is identified and the amount will be recorded in the University s debtor s ledger. After an overpayment of salary or any other payment has occurred, the ex-employees will be provided with written notice of the background to the overpayment, the amount, and immediate payment demanded. The address will be the last known home address held on the Electronic Staff Record System. Payment will be requested within 14 days. If no response is received from the ex-employee within the 14 days, the Payroll Provider will inform the Department of Human Resources who will notify the nominated University representative for debtor collections. The University s normal Debt Recovery Procedure will then be followed for the amount outstanding. All existing overpayment loans are terminated for employees who subsequently leave the University for any reason. Any outstanding balance will be recovered in full from final pay (or any arrears subsequently due to the employee). Should the final salary payment (or the amount of any arrears subsequently due) not be sufficient to cover any balance outstanding immediate payment is to be demanded prior to leaving. 7

8 Ex-employees may contact the Finance Department for them to consider an application for repayment by instalments, which will require approval by the University s CFO. 6.5 UNDERPAYMENT OF SALARY OR ANY OTHER PAYMENTS The principle after an underpayment of salary is that the position will be reversed in the next available salary payment. The employee can request that the Department of People and Culture consider an interim payment. The criteria for an interim payment will be that the employee has suffered a significant shortfall in the net pay that they had expected to receive as a result of the underpayment. A significant shortfall in net pay is deemed to be a shortfall of greater than 25% of the previous month s net pay or where the employee can demonstrate financial hardship. In such cases People and Culture can request Salaries and Wages to make an interim payment. Where the effect of tax and national insurance on the underpayment is unclear, Salaries and Wages will deduct a notional 30% from the underpayment pending the position being clarified in the next salary run. No interim payments will be made where the shortfall in pay was caused by the employee submitting timesheets, travel claims or expense claims to the Payroll Office after the published payroll deadlines. 6.6 WILFUL MISREPRESENTATION BY THE EMPLOYEE If an overpayment of salary is caused because the employee has wilfully misrepresented facts or relevant data, all possible steps must be taken to effect immediate recovery. The University s CFO will decide whether to carry out an investigation that may culminate in disciplinary action and/or criminal proceedings being taken/commenced against an employee in the event of a failure to disclose an overpayment. No overpayment loan will be contemplated in this circumstance. 6.7 LOSSES ARISING FROM OVERPAYMENT Where the CFO deems an overpayment is irrecoverable or unlikely to be recovered (including cases where employees fail to make scheduled repayments under a repayment plan) the overpayment will be considered a loss due to overpayment. The University s Financial Procedures Manual requires all such losses greater than the amount of 1,000 to be approved by the Chief Finance Officer. 7.0 APPROVAL PROCESS This policy has been approved by the Chief Finance Officer and the Director of Human Resources. 8

9 8.0 DISTRIBUTION AND TRAINING PLANS 8.1 This policy will be distributed via the University s intranet. 8.2 The policy will be brought to the attention of new staff via the Central Induction process and via Line Managers during any local departmental induction. 9.0 AUDIT AND REVIEW PLAN 9.1 Records of overpayments will be maintained by the Department of Human Resources. 9.2 Monthly reviews of Payroll Discrepancies will be held by the Pensions and Payroll Department. 9

10 Appendix A Payroll Headed Paper IN STRICT CONFIDENCE Date: Dear M Notification of Salary Overpayment I write to confirm that a salary overpayment relating to incorrect payment of during the period has recently been discovered which has led to a net overpayment of. This overpayment is after the adjustment for income tax, national insurance and pension contributions where appropriate. In accordance with the University s Policy For The Resolution Of Overpayment And Underpayment Of Salary Or Any Other Payments Made Via Payroll ( Policy ), we are required to correct this overpayment, and therefore we will deduct from your salary. If you consider that due to exceptional circumstances, the timing of the reversal is not possible or you dispute the overpayment, you have the responsibility to contact Human Resources before the 5th of to suspend the reversal of the overpayment until a mutual repayment plan is agreed as detailed in the Policy. In cases where the automatic correction causes the employee s net pay to reduce by over 25% of the previous month s net pay, the automatic reversal will be limited to 25% of the previous month s net pay (excluding any adjustments). For example if you were paid 1,000 net in January, the maximum automatic reversal payment would be 250 in subsequent months. Repayments will continue each month until the overpayment is repaid in full. If Human Resources consider it appropriate, the process detailed in section 6.3 within the Policy may be initiated to accelerate the repayment of the overpayment. For the automatic reversal to be held it is your responsibility to complete a Means Statement & an Overpayment Loan Form which are both available within Human Resources. Should you leave employment before the overpayment has been fully recovered, the balance outstanding will be deducted from your final salary or any arrears subsequently due to you. In the event that there is a shortfall an invoice will be raised to recover any outstanding amount. Repayments may be made by cheque payable to the Ulster University or by Credit or Debit Card by contacting Human Resources Department directly. Please accept my apologies for this error and any inconvenience. Should you require any further information, please do not hesitate to contact me. Yours sincerely 10

11 Appendix B Overpayment Loan Form This form is to be completed in the exceptional circumstances an Overpayment Loan Form is proposed/granted. Surname: Forename(s): Department/Faculty: Extension Number: Employee Number: Campus: Period of Overpayment: Net Overpayment: Number of Instalments (6 max) Instalment Amount: Instalments To Commence: Agreed amount to be Loaned - p I agree to repay the amount Loaned of - p by deduction from salary. Deductions of - p will commence from (state month/year) Deductions will continue for months and will cease in (state month/year) and I agree that any outstanding balance will be recovered in full from my final pay (or any arrears subsequently due to me) should I leave the University s employment for any reason before full re-payment has been made. Should my final salary payment (or the amount of any arrears subsequently due) not be sufficient to cover any balance outstanding, I agree to repay the balance to the University within 14 days of departure. Signed (Employee): Date: Note: In Disputed Cases the Overpayment Loan Form does not have to be signed by the employee. Authorised (University Nominated Representative) Date: Copy to: Copy retained by: Employee Finance Department/University s Payroll Department Human Resources 11