NYS Comptroller Seal


Bureau of State Payroll Services


  Date:  July 1, 2003 Bulletin No.  415

Subject Automatic Processing of Overpayments for Inactive Employees
Purpose To provide an overview of overpayment processing and highlight the changes, resulting from the Payroll System upgrade, in the procedure for recovering overpayments from inactive employees.
Affected Employees All Inactive Employees with Overpayments(OVP).

The Payroll System provides a process to recover overpayments made to employees when that payment is  recoverable under Section 200.3 of the State Finance Law. The Earn Code OVP (Overpayment Recovery), set up on the Additional Pay Page, provides a means to deduct a fixed amount of money from an employee’s paycheck on a biweekly basis.  The recovery is set up using an Earnings (amount to be deducted each biweekly) and Goal Amount (total amount to be deducted).  The amount deducted from each paycheck is updated in the Goal Balance field each pay period by the system after the payroll has been confirmed.  The overpayment deduction ends when the Goal Amount and Goal Balance are equal.

Overpayments may occur for many reasons.  In the Payroll System the overpayment can be recovered in several ways.  This bulletin will only cover the use of the Earnings Code OVP and the change to the process of recovering money from inactive employees.
Path Compensate Employees>Maintain Payroll Data (US)> Use>Additional Pay (Agency).
New Fields None
System Processing Changes

In the current Payroll System (PaySR) an OVP could not be processed for an inactive employee.

In the upgraded Payroll System (PayServ), OVPs on the Additional Pay page that have a Goal Balance and Goal Amount that are not equal will automatically be taken from any money that is paid to an inactive employee for any reason.  The Payroll System will recover as much money as is available from any payment going to the employee from Time Entry, retroactive changes, or one time payments on the Additional Pay page until the Goal Balance is equal to the Goal Amount.  This process will continue for all ensuing payments until the Goal Amount has been met.

In preparation for the following Payroll System changes, End Dates are no longer added to the last row of any OVP when an employee is put on a Leave without Pay or Terminated.
Agency Changes

Because the OVP set up on the Additional Pay page continues to recover money whenever an inactive employee receives a payment, there are new procedures for when employees who have overpayments are Terminated, put on Leave, Retired, Reinstated from a Leave without Pay, Rehired or Transferred between Agencies.

Procedure When an Employee is Terminated or Placed on Leave with No Pay:
As soon as an employee is removed from the payroll or placed on leave with no pay, agencies will be required to review all overpayment situations.  If there is an overpayment set up on the Additional Pay page that is correct, no further action is necessary.  If the OVP needs to be set up, or if an existing one needs to be modified, the agency should insert a row on the Additional Pay Page. The Earnings and Goal Amount should be equal.  If the row is a new OVP, the Goal Balance should be deleted and be left blank.  If the agency wants an existing OVP to continue, the Goal Balance should remain the same and the agency should insert a new effective-dated row to change the amount in the Earnings field.

The OVP should only reflect the amount that is to be recovered using this process.  If the agency is recovering portions of the overpayment through the automatic retroactive process or by submitting AC230’s, that amount should not be included in the Goal Amount.  After the OVP is set up on Additional Pay, if additional money is recovered by sending AC230’s to OSC or by another means, the agency must insert rows on the OVP to update the information.  If the OVP is recovered by another means and the OVP is not updated, money will continue to be deducted by the OVP and the employee may have too much money deducted.

Procedure for Overpayments for Existing Inactive Employees:
As soon as practicable, agencies must review all overpayment situations for inactive employees regardless of when they became inactive.  This new procedure should be used and an OVP set up to recover any future money paid to that employee.   Since at one point Earn End Dates were added to the OVP when the employee became inactive, it is necessary to delete any existing Earn End Date when the new OVP is established.

NOTE:  Although the overpayments cannot be recovered in PaySR, the agency can begin to enter the OVP’s at any time in preparation for this process.

Procedure when an Employee is Rehired, Returned from Leave, or Transferred:
When employees are rehired, transferred or returned to the payroll, the agency must review the Additional Pay page for any unsatisfied OVPs that may exist.  If the OVP is not satisfied, the OVP will be deducted from any checks going to the employee, as the employee will now be active.  The earnings or amount to be deducted may be substantial and take most, or all, of the employee’s first check.  The agency where the employee has been reactivated can insert a new row on the Additional Pay page and adjust the earnings to be deducted for the OVP or enter an end date in order to review available information about the overpayment.  The OVP must be restarted to continue the deduction.

General Comments must be entered, as usual, explaining the overpayment and how all portions of the overpayment are to be recovered.  General Comments must be entered any time money is recovered through other means.  Agencies must make employees aware of the overpayment and explain how it will be recovered.

Questions that relate to processing overpayment recoveries resulting from upgraded Payroll System (PayServ) upgrade to the Payroll Audit mailbox.

Prior to August 4, questions will be answered within two business days.  After August 4, questions will be answered within 24 hours.