Recovering Wage Overpayments

On-Demand Schedule Thu, June 08, 2023 - Thu, June 15, 2023
Duration 90 Mins
Level Basic & Intermediate & Advanced
Webinar ID IQW23E0556

  • Payroll deduction limitations under state or federal wage and hour laws. When employee consent is required 
  • Alternative recovery methods when payroll deduction is not allowed or not possible. For example, in the case of a former employee 
  • Recovery in the same calendar quarter or year, recovery in a subsequent calendar year, and recovery in a series of payments. 
  • Recovery of gross pay v, recovery of net pay
  • Tax computations when there is a partial recovery
  • Wages and tax reporting for the year of the overpayment and the year of recovery
  • Best practices wage overpayments compliance training for avoiding, detecting, and controlling overpayments. 
  • The common causes of overpayments such as late termination paperwork, leave of absence errors and failure to terminate automatic wage payments 
  • Establishment and communication of employer policies and internal controls to prevent overpayments and minimize costs.

Overview of the webinar

Recovering wage overpayments can be a time-consuming and sometimes challenging process for professionals. State laws governing recovery of employer overpayment and adjustment of related taxes often vary from the federal rules and from state to state. Recovery may be difficult or cause hardship for employees, particularly in termination cases. Understanding your compliance obligations and responsibilities to your employees is critical. 

When errors do occur, it is important that employers follow appropriate procedures for making corrections and recovering overpaid amounts. 

In this webinar recovery of an overpayment in the year the overpayment occurred will be distinguished from recovery in a subsequent calendar year. This includes recovery and repayment of overpaid taxes and corrections or amendments to payroll and wage reports such as Forms 941 and W-2.

Who should attend?

  • Payroll Supervisors and Personnel
  • Payroll Consultants
  • Payroll Service Providers
  • Public Accountants and Enrolled Agents
  • Tax Compliance Officers
  • Employee Benefits Administrators
  • Officers and Managers with Payroll or Tax Compliance Oversight
  • Company/ Business Owners
  • Managers/ Supervisors
  • Public Agency Managers
  • Audit and Compliance Personnel/ Risk Managers

Why should you attend?

Wage overpayments can result in significant costs in terms of staff time for analysis and correction. Compliance issues and errors made during the correction process can add to these costs. 

Employers must abide by federal and state wage and hour laws. Usually, they cannot simply deduct money from an employee’s paycheck. In some cases, this could violate minimum wage or overtime rules or the requirement to pay full salary to exempt employees. Under some state laws, employers may not recover wage overpayments through payroll deduction without the employee's consent. 

Where an employee is not receptive to repayment, particularly in termination cases, the employer may have to resort to legal action or forego recovery.

Recovery of an overpayment usually involves wage, tax, and fringe benefit recordkeeping and reporting concerns. The use of improper or illegal recovery methods may lead to the imposition of fines, penalties, or other sanctions on an employer.

After this webinar, you will:

  • Know the common causes of wage overpayments
  • Understand how company policies and controls can minimize wage overpayments or mitigate the effects of wage overpayments
  • Know which federal and state rules may apply to the recovery of overpayments and the consequences of non-compliant recovery methods
  • Understand the procedures for reporting the recovery of wage overpayments during the year of overpayment, a subsequent year, and for partial repayments
  • Know how to compute and report tax adjustments for repayments.

Faculty - Mr.Patrick A. Haggerty

Patrick A. Haggerty is a tax practitioner, author, and educator. His work experience includes nonprofit organization management, banking,manufacturing accounting, and tax practice. He began teaching accounting at the college level in 1988. He is licensed as an Enrolled Agent by the U. S. Treasury to represent tax payers at all administrative levels of the IRS and is a Certified Management Accountant. He has written numerous articles and a monthly question and answer column for payroll publications. In addition, he regularly develops and presents webinars and presentations on a variety of topics including payroll tax issues, FLSA compliance, and information return reporting.


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