Salary Overpayment Collection Policy

Salary Overpayment Collection Procedure
Based upon a recent regulatory change for collecting salary overpayments, employers can now adjust employee payments without written authorization from the employee.  This will enable Corporate Payroll Services to collect overpayments from all active employees through their next available pay checks/vouchers.  The procedures to support this change in business process are included below.

Active Employees:

  1. Department notifies Corporate Payroll regarding the overpayment. The proper forms are submitted to process the correction.
  2. Corporate Payroll will distribute an email communication to the employee with a copy to the Departmental Payroll Representative and the Business Manager.
  3. The gross amount of the overpayment will be processed as an adjustment to the employee's next available payment. Please note, Corporate Payroll Services will allow enough remaining gross to deduct amounts for garnishments, Healthcare, Dental, Vision, Healthcare and Dependent Care reimbursement accounts, and pretax parking deductions.
  4. If the entire amount cannot be taken from the employee's salary, Corporate Payroll will deduct the remainder from upcoming payments until the overpayment has been fully repaid.
  5. All salary overpayments must be collected within the calendar year, in order to properly reflect the year-to-date earnings.
  6. Overpayments generated during the month of December will require repayment by personal check.

Inactive/Terminated Employees:

  1. Department notifies Corporate Payroll regarding the overpayment. The proper forms are submitted to process the termination form.
  2. Corporate Payroll Services determines whether or not the employee impacted is scheduled to receive any additional pay. If so, the gross amount or a portion will be deducted.
  3. If there is no additional pay, the Department initiates the first communication with the individual to notify the amount of the overpayment with a copy of the communication to Corporate Payroll Services.
  4. If the individual does not respond to the departmental inquiry within 30 days, Corporate Payroll Services sends a letter to the employee regarding the overpayment amount to discuss the options for repayment.
  5. The employee can write a check payable to Duke University for the full amount of the overpayment. Upon receipt of the payment, Corporate Payroll Services will notify the Departmental Payroll Representative and Department Head.
  6. If the employee cannot repay the full amount, a repayment plan will be established. All payments must be received within the current calendar year.
  7. If after 30 days from the first letter, repayment is not received, Corporate Payroll Services will issue a second letter to the individual indicating the amount of repayment and a corresponding deadline. In addition, the letter will reference the transition to a collection agency if no response is received. This letter will be sent Certified Mail, Return Receipt.
  8. If the employee is a Duke student and no response is received within 30 days from the second letter, Corporate Payroll will transition the outstanding overpayment amount to the Bursar's Office to post a liability on the student account. In this case, the student’s lack of repayment will affect his/her ability to graduate.
  9. If no response is received within 30 days, Corporate Payroll Services will issue a final letter using Certified Mail, Return Receipt to the individual indicating final notification and that the outstanding balance will be forwarded to a collection agency contracted by Duke University. The outstanding balance will be inflated by the 18% collection agency fee. In addition, the individual's credit report could be affected.