Payroll: Overpayments

The Payroll Office is tasked with ensuring timely and accurate wage/salary payments to university employees based on information provided by departments and in compliance with federal and state laws. However, errors in processing or reporting can sometimes result in employees receiving compensation they are not entitled to. In such cases, it is essential for employees or departments to promptly notify the Payroll Office so that overpayment can be addressed.

Overpayments must be repaid, as retaining them would be considered a violation of the Oregon Constitution, which prohibits "gifts of state funds." Therefore, it is mandatory to return any overpaid amounts, regardless of the cause or the size of the error. Departments should never suggest that an overpaid employee can keep the extra funds.

Employee Responsibility

• Report time worked accurately.
• Review earning statements each month for accuracy.
• Notify their department or Payroll Office promptly if discrepancies are found.

Department Responsibility

• Review payroll reports after each pay period to ensure accuracy.
• Notify the employee if an overpayment is detected.
• Submit an overpayment notification to the Payroll Office immediately.
• Facilitate the signing of the Repayment Agreement Form.
• Assist in recovering the overpaid funds in a timely manner.

When an overpayment is discovered, it is crucial to notify the appropriate parties immediately. Below are the steps to follow depending on who identifies the overpayment:

If the Employee Discovers the Overpayment

• The employee must notify either the Payroll Office or their Department immediately.
• If Payroll is notified first, Payroll will send an email to the department, informing them of the overpayment and outlining the next steps
• The department is then required to submit supporting documentation to Payroll.
• Central Payroll will work with the employee on the repayment process according to established procedures.

If the Department Discovers the Overpayment

• The department must notify the employee and Central Payroll promptly.
• Supporting documents should be submitted to Central Payroll.
• Central Payroll will work with the employee on repayment according to the set procedures.

If Payroll Discovers the Overpayment

• Payroll will email the department and employee, informing them of the overpayment and outlining the next steps.
• Central Payroll will work directly with the employee on repayment, following established procedures.

Central Payroll Office will work on repayment options in communication to the employee and/or department. Some options include:

Option 1: Cash Payment

Personal Check: One-time or installment payments.

• Payable to: University of Oregon
• Delivery options:

By Mail:
University of Oregon, Payroll Office
PO Box 3237
Eugene, OR 97403

In Person:
University Business Operations Center, 2nd Floor
720 E. 13th Ave
Eugene, OR 97401

Option 2: Payroll Deduction

Requires written or emailed consent.

• One-Time Deduction – Full repayment from next paycheck.
• Recurring Deduction – Installments over up to 4 months.
• NOTE: Tax implications may apply if repayment crosses calendar years.

Option 3: Student Billing Account

Overpayment may be added to Accounts Receivable billing account. Overpayments not repaid within 90 days from the initial communication date can be transferred to the billing account.

• Allows credit card payments.
• Subject to account terms, including possible interest and fees.

If no mutual agreement is reached within 30 calendar days of notification, the university will implement the repayment schedule outlined in Section 11(D) of Article 22 of the SEIU Collective Bargaining Agreement.

Repayment within the same calendar year is strongly advised. If repayment occurs in a subsequent year:

• Employee must repay the net amount plus unrecoverable taxes.
• Employee must sign a FICA Affidavit Form agreeing not to request Social Security/Medicare refunds from the IRS.
• Upon completion, Payroll will issue a tax letter to adjust Social Security and Medicare taxes (limited to three prior tax years).

Overpayments on federally sponsored awards are unallowable and must be corrected to maintain compliance. Departments must:

• Redistribute overpayments to alternative funds using PHAREDS or a Payroll Accounting Adjustment (PAA) Form.
• Notify Payroll of redistribution for accurate reversal processing.

• Repayment Agreement Form – Prepared by Payroll, signed by employee.
• FICA Affidavit Form – Signed by employee for prior-year repayments.
• Repayment Letter – Issued by Payroll for tax corrections that are from a prior year.

Payroll Office

📧 payroll@uoregon.edu
📍 2nd Floor, University Business Operations Center
📞 541-346-3151
📠 541-346-1109