In life, change is inevitable, and it sometimes requires employees to take time away from the university. An employee may need to take a leave of absence for health reasons, to care for a sick family member, to welcome a new child into the family, or to serve in the armed forces. Some employees will resign and leave the university.
When an employee takes a leave of absence or ends employment, certain procedures need to be followed and payroll adjustments need to be made. If these procedures aren’t followed, serious and costly mistakes can occur.
For instance, if an employee takes a leave of absence without pay, and this is not properly registered in SAP, the employee could continue to get regular pay amounts from the university. This is what is known as an “overpayment.” An overpayment is money paid to an employee in excess of the amount owed.
Overpayments cost the university millions of dollars every year. Resolving an overpayment takes a lot of time and effort. Since the employee has to pay federal and state income taxes on the overpayment, this can add to the confusion and complexity of the situation. And if the employee was overpaid with grant funding, this can put the university at risk.
Overpayments can be avoided if you follow correct procedure when processing leaves of absence and terminations. And if a mistake is made, it’s easier to remedy if it’s discovered early and dealt with immediately!
To learn more about the procedures that must be followed (and how to deal with an overpayment if it occurs), please take the e-course, “Managing Payroll for Leaves and Terminations.” This course will provide you with the information you need to process leaves of absence and terminations appropriately, and avoid costly overpayments. You can also view and print a series of detailed job aids, and practice what you’ve learned by working through several realistic practice scenarios.