Employees can be overpaid in even the most well managed payroll department. Yes it does happen when mistakes are made but it isn’t always the result of an error. Perhaps the employee received a sign on bonus but did not stay for the required length of time. Or the employee was advanced vacation but is now terminating before he or she has fully earned the time. No matter the reason, overpayments can and do happen and must be handled properly. The first questions that usually arise relate to IRS regulations. What is required if the overpayment occurred this year? But what if it occurred in a previous tax year, does that change the rules? Are the rules different for federal income tax than they are for social security or Medicare taxes?

Recouping overpayments is also much more complex than just adhering to IRS code! Wage and hour law compliance must also be honored when dealing with overpayments. Before the payroll department even needs to determine IRS requirements they must first determine if recouping the over payment is even legal under the FLSA. Issues such as exempt employee status, minimum wage and overtime rules for nonexempt employees must be considered when recovering overpayments from employees.

And of course, the overpayment did not occur in a vacuum when it comes to state laws. Each individual state may have their own compliance issues involving wage and hour laws! Is there a time limit for recouping the overpayment in that state? Does the employee have to be notified in advance before the deductions can begin? Or does the state just say NO! to the whole process?

Course Key Concepts: Overpayments, payroll, recouping overpayments, wage and hour law, IRS tax law, handling overpayments.

Learning Objectives
  • Discover federal wage and hour laws and their impact on recouping overpayments.
  • Identify IRS requirements on recouping overpayments in a current tax year.
  • Explore state wage and hour laws and their impact on recouping overpayments.
  • Recognize the requirements of recouping overpayments under IRS regulations in a subsequent tax year.
Last updated/reviewed: March 14, 2024
85 Reviews (274 ratings)

Reviews

4
Member's Profile
Wage advances and Commission charge backs are mentioned during the FLSA/State requirement sections of the training, but are not mentioned during the handling of collecting the money back from an employee in a subsequent year or after termination. That was my question with taking this course, and it is still left unanswered. Need to know if the rules regarding FICA, FIT, and state requirements for collecting over payments includes the collection of commission charge backs and wage advances in which the employees agreed to and signed documents allowing the repayment. Otherwise, the course is very clear in regards to state and FLSA and IRS regulations and very helpful.

5
Member's Profile
This course was very thorough in explaining the tax implications when recouping an overpayment that was inadvertently made to an employee. I didn't realize that there were different requirements dependent on whether the repayment was made in the current year or subsequent year. Anyone working in payroll as an administrator, coordinator, or manager would benefit from this course. I would like to see additional examples, such as what if an employee partially repays in the current year, and pays the rest in a subsequent year.

5
Anonymous Author
This course served as a great refresher. Vicki presented the materials in an easy-to-understand manner, and the supporting materials summarize key points effectively. I particularly enjoyed the various examples (i.e., current year, previous year) the instructor included in the presentation and documentation.

5
Member's Profile
I liked this course because it offered a great deal of information on overpayments. Anyone in business administration, human resources, or payroll would benefit from this course. It is definately worth taking. As usual, I always enjoy Vicki's presentations.

4
Member's Profile
I need this course for the RCH but it is only showing as CPE. I could not hear the presentation so I need to print the slides. This is not the first course I've taken through Illumeo but do not remember having to write a review.

4
Member's Profile
This course give really good info on overpayments and how to correct. It went into details about states that may or may not affect you personally but gave you a good idea of what/where to look for this info in your state.

5
Anonymous Author
Example overpayment scenario was very helpful in understanding how taxes are handled in a current year repayment vs. a prior year repayment. Was also helpful learning about individual state laws regarding overpayments.

5
Member's Profile
Taxes are always very difficult and when dealing with multiple state payroll situations it is very important to know which states have which rules. This course provided a lot of very valid information

4
Member's Profile
Good subject matter for all payroll professionals! This class would be good for all payroll professionals and HR staff to ensure there is a full understanding of the laws on overpayments.

5
Anonymous Author
Excellent! The information was informative and served as a great reminder of how to properly file 941-X. Breaking down the FIT and FICA sessions made the information more manageable.

4
Anonymous Author
The instructor is very well spoken. The class is laid out in a sensible manner. There is a lot of detail about state handling of overpayments. I did learn new material in this class.

5
Anonymous Author
Thank you, this course was great. I felt like it covered everything necessary and provided me with the tools to pass the exam at the end. Overall I would recommend this to a colleague.

5
Member's Profile
Some of the instructions for recouping FUTA tax was confusing and this topic needed to be addressed longer. But, overall it was a good course to understand how to handle overpayments.

5
Member's Profile
Excellent coverage of a complicated topic. Not sure if I have ever heard all the issues given in this course and will certainly keep it in mind should I encounter this issue.

5
Member's Profile
We recently had an overpayment scenario and I wish I had taken this training before that time. Vicki's courses are always straight forward and enjoyable to go through.

5
Anonymous Author
Great course with detailed information and examples. The various State information and Requirements for Overtime handling is also very helpful. A good go to resource.

4
Anonymous Author
This course was very good. I was surprised with the amount of detail. I wonder how much of this information has changed between when this was recorded and now.

5
Member's Profile
The examples scenarios were very helpful. I enjoyed the cadence and how the information was presented and the corresponding pdf file to download for reference.

5
Anonymous Author
Very helpful and informative class. Thank you very much. I did not need to know about the states listed since my employees are just in the state I reside in.

5
Anonymous Author
This was a thorough course on how to handle and process over payment situations.I learned the FLSA and state requirements as well as the tax implications.

5
Anonymous Author
Overpayments are so much work on both the employee and employer. Having a good policy that is clear and presented to the employee when hired is a must.

5
Anonymous Author
A good reminder of how important it is to try to avoid overpaying employees. It's also important to know how to correct the issue if it should occur.

5
Member's Profile
Interesting course dealing with overpayments and paying on vacation not yet accrued. Was very helpful and anyone in payroll should take this course.

5
Member's Profile
Loved this course. Great refresher and worth the time. Another one to save in my archives for future reference. The handouts are amazing as well.

5
Anonymous Author
Great course; always need a refresher on overpayments...especially when it comes to reporting it on the tax returns. That portion is always tricky.

5
Member's Profile
This course provides a good explanation of the different factors that need to be taken into account when an over payment is made to an employee.

4
Anonymous Author
The information was helpful. I have taken several classes from this instructor and sometimes it seems like she makes things overly complicated.

5
Anonymous Author
Very helpful course covering overpayments, how to handle them, and specific items to watch out for at the federal level and for certain states.

5
Anonymous Author
An excellent overview of state and federal law regarding overpayments to employees and if and how they can be recouped from the employee.

4
Anonymous Author
I feel that this course is packed full of information that should be broken out into two segments for better digestion by the recipient.

5
Anonymous Author
Instructor provided several examples which were very helpful in explaining requirements at the Federal and state levels. Very helpful!

5
Member's Profile
So much great information. So many rules to get tripped up on...this was a wonderful review to help us maintain compliance. Thanks!

5
Member's Profile
Very informative course! Really digs deep into FIT, and FICA related to overpayments. Also has great information by state. Thank you!

5
Member's Profile
very easy to understand and retain. Loved the use of examples to help explain situations, that makes it easier to relate to.

5
Anonymous Author
tHIS WEBINAR CONTAINED VERY USEFUL INFORMATION THAT HELPS WITH MY DAILY JOB. THE SLIDES WERE CLEAR AND EASY TO UNDERSTAND.

5
Member's Profile
I wish there was a way to review wrong answers- or something to reference in the pdf. so that you can study for the exam.

5
Member's Profile
Very well-put together and structured course. Easy to understand and referrals provided are very useful. Highly recommend.

5
Member's Profile
Great class, explaining what needs to be done in treating over payments. It is not easy as we thought it is going to be.

5
Anonymous Author
Great course on the varying laws across the state. Great information on how to handle overpayments that cross tax years.

5
Member's Profile
Great course to take to receive a brief snapshot of FLSA overpayment requirement, taxes, and various state requirements.

5
Member's Profile
The instructor was easy to learn from and has extensive knowledge in Payroll. I would recommend her for other course.

4
Member's Profile
Informative, detailed and challenging. I will definitely review this later to make sure I retain the subject matter.

5
Member's Profile
This course really helps break down the challenges a payroll specialist can encounter with overpayments. Thank you!

5
Anonymous Author
Good information in course. I appreciate Vicki's delivery & examples to back up the theory with relatable scenarios.

5
Anonymous Author
Instructor is very thorough. She was very clear by providing a lot of scenario's and examples. I enjoyed the class.

5
Member's Profile
Great slides with pictures, nice wording, easy to understand, used many states as examples, breakdown is provided.

5
Anonymous Author
This course started at the federal level and then pointed out a lot of states that have their interesting rules

5
Member's Profile
Clear examples on overpayment. I liked the way the author explains it. I would recommend this class to others.

4
Anonymous Author
Great overview of a complex and nuanced topic. Provides a solid roadmap on how to move on these type of issues.

4
Anonymous Author
This course helped me because I am in the process of recouping sign on bonus' that were paid in a prior year.

5
Anonymous Author
A lot of material is covered in the course, takes a lot of subject matter and makes it easy to understand.

5
Member's Profile
great course and good materials. will definitely recommend you take this to learn more about overpayments

4
Anonymous Author
The course covers in details. It would be better if it comes with more exercises for different scenarios.

5
Member's Profile
The information in this course is so helpful and applicable to my day job as a school accountant.

5
Anonymous Author
Overpaid of wages can be tricky. Vicky gives us a great tool to reference to stay compliant.

5
Anonymous Author
Very good refresher course from one of the best in the industry - very much enjoy her courses

5
Anonymous Author
You won't believe how much this happens esp if payroll is done in house. Great information!

4
Member's Profile
This was a bit of a tougher course for me but as usual, Vicki provides very good examples.

4
Member's Profile
Very good course for payroll professionals on whether they can recoup overpayment of wages.

4
Anonymous Author
Was educational and a good refresher on this important topic. Thanks for the examples too.

5
Member's Profile
Even as a seasoned payroll professional, I have learned a lot from this course. Thank you!

5
Member's Profile
This webinar contains great information. Always fun to listen to her speak. Thanks.

5
Anonymous Author
Always a lot of content and research provided by this speaker. Very much appreciated!

5
Member's Profile
Vicki Lambert is a dynamic presenter. She keeps the session moving and interesting.

5
Anonymous Author
I enjoyed this class. I like learning about overpayments. It was very interesting

5
Anonymous Author
GREAT content, very well explained. Love Vicki. I will recommend. Thank you!

5
Anonymous Author
I love Vicki and her training courses. She is so thorough, direct and clear!

5
Anonymous Author
Thanks for another good session with insight into overpayment to emoloyees.

5
Anonymous Author
The course was very interesting and the instructor was very knowledgeable.

5
Anonymous Author
This course was very informative and provided many relevant examples.

4
Anonymous Author
This was a great course! Good examples & easy to understand and follow.

3
Anonymous Author
good class for explaining refunds of taxes, I dont know what else to say

5
Anonymous Author
overpayments are a difficult to manage, this was a really great review

5
Anonymous Author
this course was very helpful and informative. very easy to follow.

5
Member's Profile
Good class. Instructor always does a great job explaining content.

3
Anonymous Author
Good refresher class. I needed to update my information for work.

5
Anonymous Author
I liked learning about how to handle the taxes with overpayments

5
Member's Profile
Thank for for sharing this information. it was super helpful.

5
Member's Profile
This was an easy and great webinar . Enjoyed it very much .

5
Anonymous Author
You taught me some CA law that I thought I already knew!

5
Member's Profile
Examples are very helpful, instructor is very informed.

5
Member's Profile
Excellent course, great instructor. Enjoyed the class.

5
Anonymous Author
I loved the instructor - a lot of knowledge was given

5
Anonymous Author
This is a great refresher course. I highly recommend.

5
Anonymous Author
"Principle" vs "Principal" Fix the slides please!

Prerequisites
Course Complexity: Intermediate
No advanced preparation or prerequisites are required for this course.
Education Provider Information
Company: Illumeo, Inc., 75 East Santa Clara St., Suite 1215, San Jose, CA 95113
Contact: For more information regarding this course, including complaint and cancellation policies, please contact our offices at (408) 400- 3993 or send an e-mail to .
Course Questions and Answers1 Question
Member's Profile

Wage advances and Commission charge backs are mentioned during the FLSA/State requirement sections of the training, but are not mentioned during the handling of collecting the money back from an employee in a subsequent year or after termination.

That was my question with taking this course, and it is still left unanswered.

Need to know if the rules regarding FICA, FIT, and state requirements for collecting over payments includes the collection of commission charge backs and wage advances in which the employees agreed to and signed documents allowing the repayment.

Or, can those agreed to types of advances always be collected back in the current year since sometimes it takes several commission cycles to collect back the total amount due from a cancellation, or because the employee signed an agreement to repay advanced bonuses out of wages if they do not become earned by a specific time frame that can cross years.

Instructor for this course
Course Syllabus
INTRODUCTION AND OVERVIEW
  Introduction to Overpayments: Handling them Correctly in 20233:40
  The FLSA Requirements20:00
  The State Requirements-Part 125:46
  The State Requirements-Part 212:06
  The Basics8:36
  Federal Income Tax11:10
  FICA Taxes13:54
  Putting It All Together & Conclusion13:04
CONTINUOUS PLAY
  Overpayments: Handling them Correctly in 20231:48:16
Supporting Materials
  Slides: Overpayments: Handling them Correctly in 2023PDF
  Overpayments: Handling them Correctly in 2023 Glossary/IndexPDF
REVIEW AND TEST
  REVIEW QUESTIONSquiz
 FINAL EXAMexam