If an employee is overpaid, he or she can either write a personal check or authorize a reduction in pay to cover the repayment. Note that the process on the Columbia campus differs from the overall UM System process.
The Columbia payroll office will not reduce an employee’s pay without written authorization by the employee or proof that the employee was afforded due process prior to a reduction in pay. Proof of due process is satisfied by providing a copy of the letters that were sent to inform the employee that wages will be reduced if he or she fails to either repay the debt or provide information to establish there was no overpayment. If an employee does not dispute the overpayment, there is no need to send either letter. The signed acknowledgement of overpayment/authorization to reduce wages form documents that the employee was informed of the right to dispute the amount of overpayment and agreed to the method of repayment.
When an overpayment occurs, the repayment must be within the same tax year. In the exceptional situations where the overpayment occurs in one tax year and is not discovered until the next tax year, there will be additional steps and paperwork required. The following information is for repayments that are made in the same tax year.
- Verbally inform the employee of an overpayment
- To obtain the net repayment amount, which takes into consideration the taxes that were paid on the amount of the overpayment, e-mail your CAPS representative with the following information:
- Employee’s name
- Employee's EMPLID
- Pay period in which employee was overpaid
- The gross amount the employee should have been paid.
If the employee agrees there has been an overpayment
- Inform the employee of the net amount to be repaid
- Obtain a signed acknowledgement of overpayment/authorization to reduce wages form, on which the employee will have elected to repay either by personal check or by wage reduction
- Repayment by personal check: Send the check, payable to the University of Missouri, to the payroll office.
- Repayment by wage reduction: The payroll office will process a miscellaneous deduction to reduce the employee’s pay which will take into account the taxes that were charged on the overpayment.
- Retain a copy of the authorization form with the department payroll records for the pay period in which the overpayment occurred.
If the employee does not agree to repayment after verbal notice
If the employee does not respond when verbally informed of the overpayment, or fails to repay the overpayment in a timely fashion, the following steps should be followed:
- Send a letter on department letterhead, via certified mail, return receipt requested to the employee's home address notifying the employee of the overpayment and the options for repayment or to contest the amount of overpayment (Sample letter #1).
- If the employee does not either respond to the first letter or meet to dispute the overpayment and based on information provided by the employee, the department still believes there is an overpayment, send a second letter (Sample letter #2) on department letterhead, via certified mail, return receipt requested to the employee's home address to confirm the overpayment will be deducted from his or her next check.
- Submit the department authorization to reduce wages form along with both letters to the Payroll Office at 801 Conley Avenue, 15 Jesse Hall.
- Retain a copy of the form and letters with the department payroll records for the pay period in which the overpayment occurred.
Note: The above process should be followed even if the employee has terminated. A miscellaneous deduction will be entered in the payroll system so that the overpayment can be recovered if the employee is later rehired.