Employee Reimbursement Direct Deposit Authorization Form: Fill & Download for Free

Thank you for the question. I am waiting for this question from long time and really wants to discuss the various aspects of the scheme. Please do read the answer completely to arrive at a conclusion on the scheme.Fee Reimbursement Scheme Analysis in Andhra PradeshWhat is the Scheme?The fee reimbursement (FR) scheme is a scheme started by Late Sri. Y.S.Rajashekhara Reddy the then Chief Minister of the United Andhra Pradesh ans continued in a slightly modified form by both the Telagana and the residual state of Andhra Pradesh till date. This scheme is started in 2008 with an estimated budget of Rs.2,000 crores in the year 2008-09. The scheme was a part of the slew of welfare schemes (which I call as self-destructive) in the run up for 2009 general election. The scheme was a massive hit among the masses and they all rallied behind the congress government and congress managed to retain power in the state (of-course with less votes but more seats). The scheme offers financial assistance to the students pursuing professional courses like Engineering, MBA, MCA, B.Ed. and Medicine. The only criteria a student need to ful-fill is that he/she need to produce an income certificate from the competent authority and the income should be less than 1 lakh per anum. That’s it one certificate and you are all set to receive a huge financial assistance from the government of Andhra/Telangana.What are the pros of the scheme? Why is it a massive hit among the people?Obviously anything which someone gets for free is lauded. Hence, Fee Reimbursement is not an exception. It is received with great applause from the weaker sections (on paper) of the society. They hailed Y.S.Rajashekhara Reddy for this pro-poor scheme and in fact attributed him a Demi-God status. The major beneficiaries of this scheme are those sections of the society who are from the un-organized sector and typically fall under the lower middle class category rather than the below poverty line category. When the scheme was introduced in 2008, if you remember till 2008 there is a boom in the software industry and every parent in the Telugu states is of the opinion that if their son/daughter completes a B.Tech. they will be earning huge income and hence all their financial problems can be solved. Since, people had this aim they were more than happy to get this un-expected financial assistance from government. In the initial phase this scheme has waived of the complete fees for the students. Hence someone who seeks an admission under fee reimbursement scheme would be paying only for amenities like library, cautionary deposit and some other facilities like transport.So, if you have followed the answer till now carefully, you must be convinced that this is a very good scheme and every other state should implement this immediately. May be you might have already started hating me somewhere deep in your heart for criticizing the scheme. My dear reader please stay un-biased and without stepping into someone’s shoes follow the rest of the answer carefully to understand the consequences of this murky scheme.What is the political angel behind the scheme?Like every other government scheme there is a political angel behind this. The political rival of congress at that time (2008) is TDP lead by CBN. CBN was the C.M. of Andhra Pradesh for nine continuous years and infact the longest serving C.M. of Andhra Pradesh. In 1995 when he took up the C.M. chair of Andhra Pradesh, Andhra Pradesh was a poor state and had literally no money to even pay the salary for the government employees. With his commitment and good governance skills CBN has put corruption levels under control, developed transparency in the system and hence increased the revenue of the state. He focused on I.T. sector which was a budding field then, he invited the CEO’s of the top MNCs and convinced them to setup their offices in Hyderabad. He went aggressively on industrialization, pharmacy sector also developed exceptionally well. With overwhelming support from the NDA government at the center infrastructure of the state was improving. Under the golden quadrilateral scheme roads were developed, connectivity increased. Two sports extravaganza namely National Games and Afro-Asian games were conducted in Hyderabad hence exceptional sports complexes were constructed. This was and will perhaps remain as the golden era in the Telugu states.The major consequence of this development is the fact that the youth of Andhra Pradesh started having good jobs. Un-employment problem which was the root cause for Naxalism in Andhra Pradesh was solved. Engineering colleges came up especially in the year 2000 a lot many engineering colleges have come up in private sector to cater the ever growing demand from the I.T. sector. So, now when it appears all is well. There is a twist in the tale. Agrarian distress and severe drought spells has teribally hit the agriculture sector, the rural population were against the government, government employs who were made to work round the clock were against the government, the Telangana agitation which started in 2000 started picking up momentum and was a given new dimension with congress promising the special state hood for Telangana if voted to power. Put together in 2004 election congress along with communist parties (CPI+CPM) TRS (Telangana Rashtra Samithi) has won the 2004 election pushing CBN to opposition.Now, if you come to 2009 election scenario, people could clearly see the difference between TDP and the congress governments and have realized the mistake they have done by now by voting out CBN. The major cause for the victory for Congress Alliance in 2004 is because of the rural constituencies favoring Congress. Educated, urban and middle class people voted for TDP. So, in 2009 the primary aim of the Congress government is to improve its urban voting, that to in a manner that the core vote bank of TDP collapses. So, they targeted the lower middle class which always looked up to the TDP government because they believed that development in the state alone can save their lives. This class is a very vulnerable class because they are never benefited by the traditional poverty alleviation programs from the governments. Hence the scheme “Fee-Reimbursement” which will sponsor the higher education for their children the dream for every lower middle class parent. Hence turning these people as congress voters by 2009 election.Another major reason is that by 2008 there are a lot many engineering colleges than necessary in Andhra Pradesh all these colleges are owned by the kith and kin of politicians. Most of these colleges are in-fact owned directly by the M.L.A.s and ministers. Many seats in these seats in these colleges used to be vacant. And, the 2008 global depression has shown the world that software boom is not a reliable profession and the threat of losing jobs overnight has pushed many parents towards traditional jobs (government jobs). Hence to rescue the owners of the private colleges (politicians or at-least their funders), fee reimbursement is introduced.What are the consequences of Fee-reimbursement?The most positive out-come of this schemes are1. Increase in the digital literacy.2. Women pursuing professional courses have grown in leaps and bounds earlier when the family could afford only a single child education, often women were deprived of their education even though they perform exceptionally well when compared to their male sibling.The following are the dark side of fee reimbursement scheme1. Quantity of engineering and management graduates has increased exponentially. Hence leading to severe un-employment problem. Remember un-employment is a serious social concern and can create lot many problems than anticipated.2. Quality of the engineering graduates has remained pathetic, this is because many colleges doesn’t have at-least properly faculty and facilities. Hence we generate “on paper engineers without any skills”. Mark my words I am very firm on this statement.3. The burden of spending on fee reimbursement has kept multiple developmental activities at bay, hence development is crippled.4. Corporate engineering colleges often lure students from rural background with the help of internet centers and PRO’s into their institutions with fake promises and spoil their future. The promises will be like we will guarantee you a degree with 70%, you need not come to college etc.5. The growing perception among parents that to stay jobless after B.Tech, is common after looking at these improperly educated people has pushed many parents to send their children to deemed universities outside Andhra Pradesh which charge at-least 12 lakhs for completion of B.Tech. This has hit on the pockets of the parent very hard. Yet, parents are ready to bear this financial burden for the sake of their child’s future.Enough of criticism, how to improve the scheme and bring benefit the studentsI don’t want to sound like a regular politician by crying foul about the existing scheme and just blabber on the shortcomings. I propose the following modified fee-reimbursement scheme. I feel myself qualified to propose these solutions having been in engineering academia for more than a decade.1. Implement an education loan scheme, free of interest for the duration of education and one more year as grave period and then imposing a reasonable interest. This scheme has to be made available for any student whose parental income is less than 5 laks per anum. There is no harm in this scheme because here the money is on a rotatory basis. This is a loan and hence there will be no burden on the treasury every year. Another great impact of this scheme would be that non-serious casual college goers because government is sponsoring them shall not waste the government money which earlier is the case. The serious concern in this scheme would be, people who were till now habituated to get freebies from government may turn their back at the government. But this scheme if implemented will save at-least 5,000 crores every year for the ex-chequer. This amount can be spent on providing basic facilities like drinking water, last mile connectivity for villages and improving the drainage system.2. Restrict the scheme only to the meritorious making this a merit-cum-means scholarship. The merit criteria need not be stringent like 70% or 80% but at-least clauses like no back-logs and 60% (bare minimum needed to get a job after B.Tech.). Also, make attendance mandatory and track the attendance using bio-metrics to make sure that the scheme is not misused by colleges which often collude with students to enjoy the government funds.3. Improve the standards of engineering colleges. Stop playing with the future of students. Shut-down colleges with insufficient and under-qualified (Ph.D. qualified) faculty. Also colleges placement statistics need to be audited every year by government agencies and this data has to be made available in public domain and students should not be cheated by fake placement statistics from the engineering colleges. This step of improving the quality of engineering colleges is an urgent need and upto some extent Telangana government has done this.4. Strictly monitor the income certificates issued by the competent authorities to make sure that only the real poor get the benefit.Note: Views expressed are personal.Please leave your comments below and in case if you like the content and feel this is useful please do up-vote which will boost my confidence. Thanks in advance.

Well, I didn’t quite get fired, but I got one serious, formal write-up, and my manager, the head of HR, tried to write me up for something else, and she ended up looking really, really stupid.But still, it was obvious I needed to get out of there, and grad school was what to do next. It was already April or so, thus most schools would not accept me. But I got an excellent GRE score, and blasted that score out to maybe 50 schools with rush/priority or whatever the option was called. Eventually I found a decent (in the top 25 or so) program that had rolling admissions.Anyway, back to the job. It was the HR department. It was my first “real” job after I got my BA. Occasionally I noticed old (at least 5yrs old) org charts indicating that HR once had had a VP and Sr. VP, but when I was hired, Manager was as high as it went, and she reported directly to the President. I think she got her BA at a very mediocre-to-bad place, since she had no formal learning about HR. The lightbulbs got changed, and she was checking in on staff whether they were an improvement to our working conditions. I made some off-hand joke about the Hawthorne Effect. She didn’t get it even after I explained it to her.We were a good sized credit union, Federally insured, of course, and had some sort of special relationship with the military because we had branches in some odd places just so a military base could have a financial institution. Well, an African-American disgruntled applicant (or pre-disgruntled person, since she actually never applied in the end) wanted to see our Affirmative Action Plan. The manager never actually spoke with the disgruntled person; rather, I, the youngest and least senior member of the department (and also the only male) had to shuttle back and forth from the Manager’s office to the front desk, repeating lame variants on “Well, it’s a secured document,” “We do not have access to it at the moment” and excuses like that. Eventually the disgruntled lady left in a huff. I was the worst possible person to be trying to calm her down, because of my skin-color (I’m white), gender (I’m male. While I am far from intimidating, and really tried to keep the situation low-key and collaborative, using a male is more likely to bring about escalation of conflict even in an office setting. My age didn’t help (many people consider it insulting to be forced to deal with an a person who is inexperienced, powerless, and likely somewhat incompetent due to their lack of experience. All these issues were exacerbated by the fact that the Manager’s office was right in plain sight about fifteen feet behind the front desk and I kept going back to her office for advice/support.Many of you may not know much about required Federal filings in the US, but Annual EEO-1 reports are required if a business meets any requirement listed below:We were more than large enough >500 to require one just based on the simple number of employees, regardless of anything else.We were a financial institution, almost all of which must file. We met all three of the possible criteria for filing. If you even meet one of the criteria, you must file (besides the # employees issue by itself).Held Federal Contracts >$50,000. It’s remotely possible that I’m wrong about this one, but with our branches on bases, I’m pretty sure we had *some* dealings with the Feds, even just “who will pay to resurface the parking lot” or other minor stuff that could exceed $50,000 pretty easily if you add them up/Federal Depository in any amount. I am almost certain we handled direct deposit for military members on several bases in AK and WA, and the Philippines until Pinatubo erupted.Again it’s possible I’m wrong, but I think we handled savings bonds and Notes.So. We should have been filing annually. They’re not fun, but not terrible either. The manager didn’t do them because she had no idea what they were or that we needed to file them. We also needed an Affirmative Action plan, updated annually. This was the report the disgruntled lady wanted to see, and while the EEO-1 is considered confidential, disgruntled lady had a Federally mandated legal right to read our Affirmative Action plan. But there was no such plan to read and we hadn’t been one for years. . .Anyway, I did not get in trouble for that one, although my manager was not happy when afterward I pulled one of her BLR binders and showed her the requirements for EEO-1 and Affirmative Action (BLR binders documented every HR-related law or regulation. They came in print and provided extensive commentaries/explanations/clarifications. Once a month, a packet would arrive for updating the binders. Those binders took up a *lot* of shelf space.).The reason I was able to easily pull out exactly the right binder and go to the right section was that I was enrolled in an HR class that was part of the MPA program at the University and had studied the issues surrounding discrimination, Affirmative Action, and sexual harassment recently. With her permission I used the BLR binders as a resource (if you’re curious, an MPA is a lot like and MBA, but is meant for non-profits and government workers). Anyway, I filed the required paperwork for tuition reimbursement once I had my grade in hand. The main requirement for reimbursement was that the class(es) you were taking needed to be related to your current job. Guess who oversaw the reimbursement program? My manager, of course (ultimately the President signed the paperwork, but she decided which which ones were worthy of his signature). My reimbursement denied of course. Recently I had gotten a small promotion for handling Employee Benefits instead of screening job applicants. I still had the same co-workers, same horrible boss, and only moved to a desk about ten feet away from my old one. She explained to me that benefits were more of a payroll issue than an HR issue, and since I was no longer an truly an HR worker, the class was not related to my job.Oh, two really nasty situations arose while I was doing benefits.We had a recently hired teller who became pregnant (she probably had 90 days on the job, since that’s when health insurance and such kicked in). My manager was dedicated to proving the pregnancy was a pre-existing condition. Evil. And the manager handled it like the disgruntled lady.The other benefits nastiness involved our retirement plan. *now* I understand Annuities vs defined benefit vs defined contribution, but back then I didn’t know much of anything about retirement plans. We had a defined-benefit plan. One day a fairly high ranking employee called me to ask about a lump sum immediately vs. letting his money ride (I don’t know how he could pull out his retirement money and keep working, but somehow he could. (I think it had to do with being the director/CEO/President of a company that was technically separate but wholly owned by the credit union). Anyway, he was concerned that his lump sum value might shrink soon. I discussed it with my manager,and she didn’t seem to know much either. When I told her that he was insisting on a solid answer ASAP, she finally gave me a definitive answer: your retirement funds will never decrease. The plan provides defined benefits, so the value is not affected by the stock market. Your benefits just keep growing while you are working and will never go down. I called the man back, and while he didn’t seem entirely convinced (my utter ignorance and confusion in the previous call probably didn’t help).A little while later, probably after a month had passed, I heard from him again. He was absolutely fuming and ready to sue. Apparently the value of the lump sum *had* decreased, and by a large enough amount to make him extremely angry. My boss was out, so I directly called up the company that managed the plan.I didn’t know how lump sums vs annuities vs regular defined benefit plans worked, having had no exposure to retirement products at the tender age of 20 (I actually did already understand in a basic sense how defined contribution plans because they are basically just investing with pre-tax dollars and maybe a match from your employer). Anyway, the kind and patient representative of the company that managed our retirement plan explained that a lump sum was calculated based on the total amount of money you would expect to receive from the plan if you lived your full predicted lifespan, adjusted for assumptions about what investments would yield during that period. If investments in general were doing well and were expected to continue to do well, a lump sum might go up, but if investments were doing poorly and expected to do so in the future, a lump sum could go down. Or perhaps they pegged the yield to the prime rate or treasury bonds. In any case, the expectation of return on investment the company used for calculating lump sums had gone down bit, thus causing the amount of a lump sum to go down. BTW — this was 1993 or ‘94. I think that the company used some sort of rolling average, and they had just included the 1990 recession in the years they were using. Or maybe it went down for some other reason.In any case, I managed to regained the trust of the person who had lost money. I confessed my ignorance and apologized for any harm that came from it, and basically told him what had just been explained to me. He already understood the issues, since he paid attention to his statements and understood retirement plans, but at least now we were on the same page. With the boss out of the office, I couldn’t do anything to solve the problem but we would see once she returned.When she returned to the office, she blamed the whole thing on my having overstepped my bounds and made promises on behalf of the organization that I was not authorized to make (going back to her statement that “Your benefits will never decrease,” etc., only now, she said that I had made up the erroneous statements on my own). Luckily, I did not get written up or fired. I think it was because I knew that the lump sum guy had been made whole using funds from the Credit Union (not the retirement plan), and that a VP or above had back-dated the check to make the amount match what it would have been in an alternate universe. I’m not sure exactly whether they committed a crime or not, but the manager wanted to keep it hush-hush, so she did not retaliate. At least not immediately.Shortly thereafter, I was written up for violating company policy and state labor law. I was accused of arriving early, sometimes taking lunches more brief than allowed, and also, I sometimes worked late to complete a task. I probably showed up ten minutes early every day because the penalties for tardiness could quickly lead to termination. I admittedly had the habit of failing to use my last five minutes at lunch. Staying late could vary, but I usually left and 5:00 and if the task was going to take more than 20 minutes or so, I’d just leave the work to be completed the next day. By engaging in this unauthorized behavior, I was creating a dangerous legal liability for the Credit Union. I might be keeping track of my extra work time, planning to sue for failure to pay me for the extra work, and also attempt to gain a punitive award. I thought it was a very, very strange accusation, but I was clearly guilty of the behavior she had documented.So: one strike. Two more write ups meant termination.The next attempt to write me up was based on the accusation that I had misrepresented my access to the Credit Union President while conversing with one of our branch managers. I did have a conversation with that manager regarding a Tuition Reimbursement taking longer to process than she had expected. I told her something along the lines that the forms for that program needed to be signed by the President, and due to busy schedules, apparently my Manager had not had an opportunity to meet with him recently.My Manager accused me of having told the Branch Manager that *I* had not had an opportunity to meet with the President lately. The hierarchy was very rigid; only once in three years was I allowed enter the top floor where the executives were, and that was just to quickly drop something off with the receptionist on my Manager’s behalf. So meeting with the President would be absurd for somebody of my stature. While my Manager was preparing my formal reprimand, I asked if we could call that Branch Manager and get her recollection of the conversation. My Manager was convinced enough about what she had heard that she agreed. It would just be more damning proof of my having said what she had overheard.We called, and the Branch manager could not recall the conversation in complete detail because it was such a routine non-event, but she was certain she would have remembered if I had claimed to be having meetings with the President. So it was my memory and the memory of the Branch Manager against my Manager’s memory. I had narrowly avoided my second formal write-up.After that incident, the Manager and I experienced levels of defensiveness and hatred that I never knew existed. I had generally been rather obsequious and deferential if it looked like her anger and hatred of others was likely to surface. After my “win” from the Branch Manager backing up my side of the story, those who knew about the conflict were glad. She had always been erratic and sometimes just made no sense, but this was the first time (as far as I knew) she had been called on her bullshit and had her power and judgement questioned.Now, I just didn’t care. I spent much of an entire week attempting to get our magical new Laser Printer (bye bye, dot matrix!) to communicate with our mainframe accounts and the terrible, horrible software we used for managing some of our information about employees (the bulk of the information was still stored as hard copy in about 15–20 filing cabinets).I did it! The mainframe could print to the Laser Printer. Much of my time had been spent typing letters notifying individuals about significant changes to their benefits (gaining health insurance after 90 days, bumping up to the next level of the defined benefit plan after ten years, COBRA eligibility upon termination, etc., etc., etc.) Many different events, each with a separate report from the mainframe. I didn’t need to type the whole letter; we had the various notifications created by a printing company on CU letterhead, so I generally just needed to type their name, one or more dates, and maybe a little more for some of the letters. Anyway, once I had it going, I started with the most common notifications and worked my way through the different types of letter. It was a *very* annoying and error-prone job to get the mainframe to put the names and dates and such in the proper parts of the letter, but it was possible, and a lot more fun than typing them. In addition, it really ticked off the Manager. IT staff had connected only her terminal to the Laser Printer. But they set it up in a communal area surrounded by our staff. When she finally noticed what I was doing, she was angry, but the staff were glad to be able to get away from the dot matrix, and were looking forward to automating processes like I was doing. It was such an obvious improvement to the speed, accuracy, and appearance of our work that she backed off, which had seldom, if ever, happened before. I suspect that word of her going loony-bird about meetings with the President had made its way to the executive suite and she may have been told to calm down or something. Or, she was just having an unusually nice day. I dunno.About a week later, I was accepted to grad school. There was still time to participate in the summer construction-and-related-activities boom that happened each year in Alaska. So I left the Credit Union, planning to get the highest paying job possible for the Summer. Thus, I became trained in hazardous waste labor and earned more money in ten weeks than I would earn at the Credit Union in a year. Then my life really began, upon entering grad school.If you made it this far, great! Thanks for paying atten for so long to a relatively uneventful story.That manager was a vicious person who was probably in HR precisely because her position allowed her to be a bully as an adult. The pre-existing condition issue for the pregnant teller, was just one little event out of many. There was a young married couple in the building; she worked in the branch doing something more than a Teller but less than a Loan Officer or Management. Member services Rep, I think. He worked as a groundskeeper mowin the grass and such at first, but it turned out he actually was educated, intelligent, and diligent, so he moved to a much better position in Real Estate. A move that dramatic was practically unheard of. The birth announcement about their first child was proudly communicated to the whole organization by somebody important. If that was on a Monday, then fast-forward to Wednesday, two days later. She fired the husband for his third tardy of the year, just two days after we celebrated his child’s birth. He was not very tardy, less than five minutes I believe. The Manager in Real estate didn’t want him fired, and I believe it was that manager who brought the absurd situation to the attention of somebody on the Executive floor. The new father’s termination was rescinded the same week it occured.In another brazenly cruel situation, HR had an employee foisted upon us from Insurance. Our new co-worker had apparently worked in insurance for much of her life, but was new to the Credit Union. She had been working in Insurance for perhaps a month before she was moved to HR. It was soon apparent why the Insurance department had wanted her gone. She was probably in her mid-to-late 60’s, and I suspect that she had been a rather odd character for her whole life; her quirks were probably not due to her age. She was one of the kindest, warmest, most loving people I had ever met, but she simply could not think on her feet and get complex tasks accomplished. She wasn’t particularly useful, but she made a decent receptionist (she loved to smile and greet people coming through the door.) She could take messages just fine, and efficiently operated the receptionist phone with multiple lines to forward calls. I never did understand how to work that device very well. apart from being friendly and greeting people, we would occasionally assign her simple tasks, such as stuffing a bunch of envelopes or alphabetizing 1000 job applications. She was rather slow, and sometimes got hung up by minor complications that most of us could simply work around. So: not a fast and efficient employee, but a wonderful person who was able to contribute to the organization, just not by doing complex tasks. Attacks began. First, our Manager forbade her to have a water bottle or snacks at work. The lady countered with a note from her doctor that declared that she needed water and snacks available at all times; might have been diabetes I dunno for sure.This is the longest post I have ever created, and is one of the few with any type of narrative. Please comment about what you thought. Good, bad, boring, enjoyable, painful, whatever!

Absolutely first, you should notify the employee, or group thereof, that there was a payroll mistake that led to him/them getting more money than they were due. Do this as quickly as feasible. Print out a copy of their paystub, and show them how the error was made.You should check your local and state labor laws, and the applicable federal labor law, to make sure that you have the authority to make a deduction from a future paycheck to rectify this problem. In Texas, if you overpay an employee and you can’t fix the mistake before the check has been cashed, or the direct deposit has been made, or the payroll reports have been submitted to the IRS/Treasury (etc.), you can, legally, make a future withholding in order to compensate yourself (i.e., the business) for the mistake, if you notify the employee(s) affected and you only take back what is yours. For instance, I wouldn’t charge interest on it and treat my own mistake as some sort of loan or payday advance; that would not be legal.You’re not required to take the money back, but most employers would choose to do so, for employee income tax reasons. If someone worked 39 hours, and you paid him for 40, then his W-2, which he’ll receive and use to fill out his income tax returns, will show an increased income amount. It will not match reality. — That’s a tedious accountant’s argument. A shorter way to say it is that the employee should have the choice to keep the money or give it back, if keeping the money is an option. You, the employer, do not know the personal financial situation of an employee, nor should you assume to or try to. A significant overpay (e.g., a series of overpayments, not just a one-time occurrence) may cause an employee no longer to qualify for various government benefits, like disability or food stamps, et alia.You really do not want to be responsible for something like that. You might find that, after all is said and done and W-2s have gone out and people have employed tax professionals to do their tax returns, and you have done the same, that the employee then asks you to correct your mistake, leading to you having to amend your own payroll tax and income tax filings, making you more at risk for audit; and, you’d be responsible, civilly, for reimbursing the employee for any professional fees (think: CPA expenses) they incur due to your mistake; and, if you refuse to correct the mistake, then you may end up in a legal battle you’re going to lose (think: attorney’s fees, costs of court, damages).You, as operator of the business, have a vested interest in making sure the documents you produce (e.g., financial statements) match your operational realities. — That’s Financial Accounting 101. — It’s not just that most business operators would want to minimize payroll expenses and maximize profits, and therefore take advantage of the opportunity to recover payroll overpayments; it’s also that failing to do so increases your exposure to risk.Remember, the employee, or you, may not figure out this overpayment was made for weeks, months, or years. If you don’t make sure your stuff matches reality, period after period, you may find yourself trying to correct a mistake years in the future, when the employee no longer works there; the payroll clerk who made the mistake is no longer there, and you end up acting in a “forensic” capacity.That takes time, and time is money. So, fix the mistake, even if you think it’s small; even if your employee protests, because he or she wants to keep the extra money.With everyone involved now convinced it’s in the best interest of everyone that the problem be fixed (or not — like I said, in Texas, the employer legally can deduct money from an employee’s future paycheck if that employee has been found to have received an overpayment on a past paycheck), use a simple contract to record the transaction.If you can’t remake the check or re-do the direct deposit, then you will need to make a change to a future paycheck that affects the employee’s federal withholding and FICA taxation; similarly, the change you make should reduce the business’s employer matching taxes and federal and state unemployment “premiums”.If it’s an hourly employee, and you paid 40 hours at $15/hr when it should’ve been 39 hours at $15/hr, then the easiest mechanism is just to subtract 1 hour from the next paycheck. That’d be 1 hour at $15/hr. — If you do that, your bookkeeping/payroll software should auto-compute a best-guess reformulation of the federal withholding, tax, and FUTA (federal) & state unemployment payments.What you need, though, is something to put in the employee’s file that he or she was notified that this was going on, so that his timesheet doesn’t say he worked 40 hours, and you only paid him for 39 hours — by mistake.Contracts require quid pro quo to be binding; we’re doing more than just having the employee sign an acknowledgment. — Again, if the situation is just over $15, you might not think this is necessary, but this way will work for $15 or $15,000. Protect yourself.—“(Employee’s name) and (Business’s Name) agree that (Employee) received a payroll overpayment in the nature of ___________________________ on (date). (Business) agrees to allow (Employee) to keep the overpayment until the next pay date, when (Business) will make an alteration to that paycheck, to the best of its ability, to correct the situation. (Employee), in exchange for being allowed to keep the overpayment until that date, agrees to allow (Business) to make the alteration to his next paycheck and understands and agrees that it is acceptable that (Business) will do its best to rectify the situation such that the final result puts the financial situations of (Employee) and (Business) back, as close as possible, to what would have occurred if the original (or only) overpayment(s) had not been made. Due to the nature of payroll tax accounting, which (Business) follows but does not control, and/or the manner in which (Business’s) payroll/bookkeeping software operates when computing federal withholding and FICA taxation, which also is out of (Business’s) control, (Employee) understands that minor differences may arise but that they will be immaterial, if present, for the purposes of tax reporting.“After corrective action has been made, by (Business) on (Employee’s) next paycheck, (Business) shall furnish (Employee) with the most current copy of his year-to-date earnings summary and federal withholding and FICA remittances, for his or her review, and if he or she would like to make any changes to his Form W-4, (Business) will provide a copy of that form to be filled out, and upon return of the updated W-4, by (Employee) to (Business), (Business) shall enter any changes found therein, into its payroll/bookkeeping software.”Signed on __ of ____, _____,” →—Have the employee sign and date the contract, and have the payroll clerk or an officer of the company/corporation sign and date it as well, with employee’s printed name, and clerk/officer’s printed name and title, underneath the signatures.This is really just a simple little contract, and you can change the wording around to fit the exact situation. It’s just what I came up with while writing this answer. It should suffice for simple situations.You will have problems when the amount of overpayment (e.g., this is a series of overpayments, not just a single one) is greater than the NET income of the employee for that week.For instance:Gross Pay $600Child Support Garnishment <$100>Fed W/H <$50>FICA Taxes <$50>→ NET PAY $400And, the amount of overpayment is $600.—You can take the $400 this week, though your employee is going to be very pissed off at you, because all of a sudden, he has “ZERO PAY” for the week. It’s legal, but it’s a good way to get your employee to quit.What you CANNOT do is take the $600 in gross pay, and not pay the garnishments, levies, withholdings, taxes, etc.You will have to wait until the next paycheck after this one to recover the rest of the money.Let’s say the employee’s net pay for the first week after the overpayment was discovered is $400, and the amount of accrued overpayments is $600. You might consider setting your contract up such that $200 is taken out each week until the $600 is repaid; spread the deductions out over some mutually agreed-upon number of weeks (MINIMUM: THREE).The employee knows that he got money he didn’t deserve, but it wasn’t his fault. That is arguable, of course, and the law in Texas says you can deduct $400 this week and $200 next week, but that’ll mean the guy gets $0 this week.Is he going to come back? → You really should HOPE SO, because if he doesn’t come back, you’ll never recover the unrecoverable amount (in this case, another $200).Compassion is necessary. — Of course, if this is the employee’s final paycheck, you would take all $400 and send the guy a bill for the other $200. Good luck collecting that! — This is a civil matter; unless the laws of your land are very different from mine, the mistake is construed to be on-you, and it’s not theft (by the employee). Your recourses to recover, in that situation, would be to call and beg repetitively; send it to a collection agency; or, sue the now-ex-employee.None of those are great choices, and they get worse from left to right.Finally, what if you discover an overpayment, made on payday 12/31/00, on 1/1/01?The employee(s), in this scenario, received an overpayment in the past FISCAL YEAR. Now, you are considering undoing the mistake in the current fiscal year. — Remember what I said about matching?I’m not going to belabor the subject. — Just realize that this is a trickier situation, and if you don’t know what to do, then you should be talking to a CPA or other tax professional.