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Policy and Procedure Statements

UPPS 03.01.11 - Employee Financial Obligations

Employee Financial Obligations

UPPS No. 03.01.11
Issue No. 4
Effective Date: 12/06/2024
Next Review Date: 3/01/2029 (E5Y)
Sr. Reviewer: Director for Payroll and Tax Compliance

POLICY STATEMENT

Texas State University is committed to promoting proper financial stewardship of indebtedness of employee excess compensation.

  1. SCOPE

    1. This policy establishes procedures to recover excess compensation and other financial obligations to Texas State University from Texas State employees, as authorized under Government Code, Title 6, Subtitle B, Chapter 666.

    2. Texas State may recover the amount of an employee’s indebtedness to Texas State by deducting it from any compensation Texas State owes the employee or the employee’s successor (see Section 02.06 for the definition of successor). Texas State may delay paying compensation or expense reimbursements equal to the amount of employee indebtedness to Texas State until indebtedness issues are resolved.

    3. Account managers and other Texas State administrators who become aware of employee indebtedness to Texas State, as defined in Section 02. should notify the Payroll and Tax Compliance Office in writing, detailing the debt’s amount and nature.

  2. DEFINITIONS

    1. Compensation – for purposes of this policy, employee compensation refers to the combination of salary and wages, benefits, bonuses, and any additional perks employees receive for performing their job.

    2. Date of notification – defined for each situation as follows:

      1. Hand-Delivered – the date of actual delivery;

      2. Electronic Notification (such as email or fax) – the date sent; and

      3. Mailed or Shipped – the earlier of the actual date received, as shown on mail or other shipping records, or three days from the date of the mailing or shipping notice.

    3. Excess Compensation – all amounts of compensation paid to a Texas State employee that exceed the amount the employee is eligible to receive.

    4. Indebtedness – the amount of compensation paid to an employee that exceeds the amount the employee is eligible to receive because at the time the compensation was paid:

      1. the employee was ineligible to receive the entire amount paid; or

      2. the employee’s eligibility to receive the amount paid was contingent on either the occurrence of an event that did not occur or the employee’s fulfillment of a promise that the employee did not fulfill.

    5. Other Debts – amounts owed to Texas State other than those defined previously as “indebtedness.” Texas State will not deduct other debts from an employee’s compensation or expense reimbursement unless it has written authorization for the deduction from the employee.

    6. Successor – the estate of a deceased Texas State employee, the surviving spouse of a deceased Texas State employee, or the beneficiaries of the estate of a deceased Texas State employee.

    7. Texas State Employee – a faculty, staff, or student employee of Texas State. This includes both regular and non-regular employees and their successors.

  3. PROCEDURES FOR RECOVERING INDEBTEDNESS

    1. Texas State will provide notice to the employee or the employee’s successor according to Government Code, Title 6, Subtitle B, Chapter 666, Section 666.003. Specific procedures for notification to employees indebted to Texas State are detailed below.

      The Payroll and Tax Compliance Office will:

      1. send a notice to the address as shown in the personnel records by certified or regular mail or express shipping service. Additionally, the office may send a notice via email to the email address in the personnel record;

      2. describe the nature and amount of the excess compensation;

      3. calculate and disclose the net overpayment due, including any adjustments for taxes and/or deductions;

      4. describe how to resolve the indebtedness by payment in full or by an agreed-upon payment plan;

      5. inform the employee that failure to resolve the indebtedness may result in further legal action;

      6. hold any Teacher Retirement System requests refunds or certifications until the debt has either been repaid in full or by an agreed upon payment plan; and

      7. inform the individual of the option for reconsideration.

    2. Employees may resolve their indebtedness by payment in full or by an agreed-upon payment plan.

    3. Employees may ask that Texas State reconsider its decision to deduct their financial obligation from subsequent compensation by sending a written request to the director of the Payroll and Tax Compliance Office within 10 business days of the date of notification specifying the reason Texas State should reconsider its decision. The request may include documents, names or witnesses, or other evidence that the employee wants to be considered. Texas State will not consider requests received after 10 business days of the date of notification. The director of the Payroll and Tax Compliance Office will send the employee a written decision on the matter within 10 business days of its receipt. The director’s decision is final.

    4. Employees may request a payment plan by sending a written request to the director of the Payroll and Tax Compliance Office. Texas State may, at its discretion, agree to a payment plan to resolve an employee’s indebtedness. The payment plan will include specific repayment terms and due dates.

    5. Texas State will recover the amount of the employee’s indebtedness by deducting it from any amount or compensation owed to the employee or successor or reducing the gross amount of base salary or wages that Texas State owes the employee or successor for services provided by the employee during any pay period after the pay period in which the indebtedness incurred.

    6. Texas State will pay the employee any amount remaining after all deductions for indebtedness, in accordance with standard payroll processing timelines.

    7. Texas State may terminate employees who fail to resolve their indebtedness within 30 calendar days from the date of notification. These employees are also subject to penalties prescribed by law.

    8. Former employees who fail to resolve their indebtedness within 30 calendar days after notification by Texas State are subject to penalties as prescribed by law.

    9. State Hold – Texas State will report uncollected debt on the employee’s record and with the State of Texas Comptroller of Public Accounts in accordance with Texas Government Code, Section 403.055.

    10. All repayments must be received in the same calendar year to ensure the employee earnings and deductions are reported correctly on the current year’s W-2 form.

  4. AMOUNT TO BE RECOVERED

    1. The amount to be recovered from the employee includes the net amount overpaid, with the corresponding additions described below:

      1. Taxes – if repayment is not received within the same tax year in which the overpayment occurred, amounts withheld for federal, state income tax, Social Security and/or Medicare tax that cannot be recovered from the IRS or the state must be repaid by the employee.

      2. Retirement Benefits – if the employee has closed a retirement account before amounts over-deposited have been reclaimed by Texas State, these amounts (including any employer contributions overpaid) must be repaid by the employee.

      3. Other Benefits – if amounts deducted for benefits or other purposes have already been paid to the vendors and cannot be recovered these must be repaid by the employee.

  5. RESPONSIBILITIES

    1. Employees are responsible for reviewing their pay statements for accuracy, reporting any discrepancies to their supervisor and/or the Payroll and Tax Compliance Office, and repaying all overpayments made by Texas State to the employee regardless of the source of the error.

    2. Department/supervisors are required to immediately notify Human Resources and Payroll of a separation and submit a separation Personnel Change Request (PCR).

    3. Account managers are fiscally responsible for any accounts assigned to them in accordance with UPPS No. 03.01.09, Fiscal Responsibilities of Account Managers at Texas State. Account managers, and designees, are required to immediately notify the employee, Human Resources, and Payroll and Tax Compliance upon discovery of an overpayment.

    4. The Payroll and Tax Compliance office is responsible for timely notifying employees of indebtedness according to Section 03.

    5. The Payroll and Tax Compliance Office will collect and monitor receivables due to Texas State under this policy.

    6. The Payroll and Tax Compliance Office is responsible for making necessary adjustments to employee payroll information to ensure annual W-2 forms are correct.

    7. The Payroll and Tax Compliance Office is responsible for reporting uncollected debt to the State of Texas Comptroller of Public Accounts in accordance with Texas Government Code, Section 403.055.

  6. REVIEWERS OF THIS UPPS

    1. Reviewer of this UPPS includes the following:

      PositionDate
      Director of Payroll and Tax Compliance OfficeMarch 1 E5Y

  7. CERTIFICATION STATEMENT

    This UPPS has been reviewed by the following individuals in their official capacities and represents Texas State policy and procedure from the date of this document until superseded.

    Director of Payroll and Tax Compliance; senior reviewer of this UPPS

    Executive Vice President for Operations and Chief Financial Officer

    President