Q: How do you manage an overpayment value where the employee will not pay it back in full within 2 months?
An agreement made by HR/Union/Employee is for a minimal recovery each week extending well past 2 months. The overpayment was not a Payroll error as such but an agreed payment that was issued in error by HR, and the mistake was advised quickly to the employee.
- Should this become a debt to the organisation with arrangements for repayment made under Debt Management and not the Wages Protection Act since they won’t pay it back within two months per Section 6(3)(d)?
- In this case would you reverse the overpayment in payroll so the employee’s Gross earnings are reduced and tax records updated? the debt is then moved for Debt recovery outside of Payroll and not under the Wages protection Act?
A: If there is an agreement in place for longer than 2 months that the employee will follow, and the employer is happy to do it, it is still OK to do so.
You would need a policy and agreement for the debt to now be handed over to debt management.