Overview

As payroll people, we always try to get our payroll processed on time, and employees paid correctly. There will be occasions however where an employee is not paid correctly. This may involve overpaying, or underpaying an employee, depending on the situation. This segment goes over the process of what happens when an over or underpayment has occurred.

Client Responsibilities

When the over or under payment has been identified, the Client will inform their Datacom consultant of the issue and what they would like to see to remedy the situation.
Over or under payments can either be corrected in the next main run or processed in an off-cycle pay run (manual pay run)
Manual pay runs incur additional charges as well as a complete set of reports for the run. Often corrections are added to the next main run.
The Client can provide this information in multiple formats to the EasiPay Consultant.

Three of the most common ways are listed below:

• As an email with the relevant over/under payment details. Generally, this is used if an off-cycle solution is required.
• As an employee modification on ESS/DA specifying the issue and the remedy required
• If the employee has received incorrect hours, additional hours may be sent through on the timesheet to simply be added to that pay period.

EasiPay Responsibilities

A reversal and an adjustment will be created, to correct the period in question. The original incorrect pay packet will be reversed, and the correct pay will be calculated in an adjustment pay packet, these will be done against the original pay period.
Once the correction pay packets have been calculated it is possible there will be an additional direct credit due to the employee, or an amount to be recovered.
An additional direct credit will occur when there was an underpayment to the employee. In this case, the reversal/adjustment results in the employee receiving more pay, after tax. This will be paid out when the payroll has banked.
An amount to recover will occur when there was an overpayment to the employee. In this case, the reversal/adjustment results in the employee receiving less pay, after tax. As this was already paid out, resulting in the overpayment, the amount to recover will need to be recovered. This can be done through payroll (as a deduction in the main pay packet when the employee gets paid), or internally, through the company asking the employee to pay directly to them. The recovery will not happen automatically as companies have varying policies as to how to recover over-payments. If you would like to recover this amount using a sundry deduction taken from the next pay packet, you will need to advise your Consultant. Failure to deduct an overpayment amount through the payroll, will result in a difference in the General Ledger files ie the correction has been made in the payroll but the funds haven't been returned.