UNIVERSITY OF MINNESOTA POLICY

Payroll

ISSUED/REVISED: 1/93, 9/95, 5/99, 12/99, 12/2004, 3/2006, 8/2006

REPLACES: 4/89

To obtain a copy of a historical policy, e-mail the U Policy Librarian at policy@umn.edu or call 612-624-4372.

This policy covers: types of payrolls, manual checks, salary overpayments, Social Security coverage, authorization of payroll deductions, wage garnishments, and unclaimed payroll checks.

GENERAL

The University of Minnesota has one biweekly pay cycle. Biweekly payroll is paid on a 10 day delayed basis every other Wednesday.

Employees have the option of receiving their earnings by check or by direct deposit into a member bank of the employee's choice. Paychecks or direct deposit stubs are distributed by Payroll Services to distribution points on each payday.

 RESPONSIBILITIES

 Departments are responsible for the prompt payment of employees in accordance with Minnesota Statute 181.101, which states employees must be paid on a regular pay day designated in advance by the employer regardless of whether the employee requests payment at longer intervals, but at least every 31 days. This is accomplished through timely preparation and submission of complete, authorized appointment and payroll documents. Approval authority for appointment documents will either be from the Office of Senior Vice President for Academic Affairs, the Office of Human Resources, or Student Employment Services, depending upon the position in accordance with personnel policies and bargaining unit contracts. Personnel policy manuals and bargaining unit contracts exist for academic, civil service, and student employees. Deans, department heads, or designated administrative officers are the approval authority for payroll documents.

 DEPARTMENTAL INTERNAL CONTROLS DEPARTMENTAL INTERNAL CONTROLS Departments are responsible for maintaining adequate internal controls in their departmental payroll processing. This includes establishing an appropriate separation of duties in their payroll processing functions, assuring that payroll entries are approved at the proper level, and that entries are verified for accuracy once they are processed. Departments need to maintain adequate backup documentation to support time worked by hourly / time-card employees; to record employee absences due to vacation, sick leave, or other leaves; and to document payments for overtime worked or other pay types (e.g. augmentations, shift differentials, or taxable fringe benefits). A department's responsibility includes maintaining an effective system of monitoring and oversight to ensure the accuracy and validity of its payroll. A detailed listing of recommended internal control activities for department payroll processing can be found at:

http://www1.umn.edu/ohr/payroll/controls/index.html

 OFF CYCLE CHECKS

Off cycle checks may be issued to employees who did not receive a check due to them on their normal payday, or when being terminated by the University. The department will be responsible for requesting an off cycle check through Payroll Services.

SALARY OVERPAYMENTS

 The University will seek reimbursement for salary overpayments in excess of $100, made to former employees. All salary overpayments should be identified and reported to Payroll Services, who will coordinate the collection effort.

SOCIAL SECURITY

 Under a state agreement with the Secretary of Health and Human Services, Social Security coverage is extended to all University employees, including part-time nonstudent academic appointments, but excluding student appointments meeting Student Employment eligibility requirements, University Police Officers, certain federal employee appointments, and some nonresident aliens.

All wages earned by employees with Social Security coverage are subject to withholding and reporting of the Social Security and Medicare tax.

AUTHORIZATION OF PAYROLL DEDUCTIONS

1. No new deductions may be made from the salary of an employee for payment to an organization or to an organizationÕs proposed benefit unless at least 100 employees of the University are participating.
2. There must be some benefit to both the employee and the University in allowing the deduction. For example, deductions for season tickets to University athletic events and for University-owned mortgages benefit both the University and the employee.
3. A proposed fringe benefit deduction will be reviewed by the UniversityÕs Employee Benefits Department to see if a comparable or better fringe benefit is already offered by the University. Existence of a comparable plan available to the employee group in question will be grounds for denying the request.
4. Any organization from outside the University will be charged a onetime fee, which will include costs of any programming needed, setup costs, and estimated costs for administration and maintenance of the program. This fee will be determined in each case by the type of deduction and how it is computed, the number of employees involved, expected maintenance to be required, etc. In addition, a recurring annual fee for administration and maintenance will be charged.
5. Any organization within the University will be charged actual costs incurred to set up the new deduction field for the applicable employees.
6. A contract with the organization will be prepared for each new deduction allowed. The contract will explicitly state that if the University remits to the organization an amount in excess of that required, the organization will refund the University the amount of the overpayment. If no refund is returned, the University will subtract the amount of the overpayment from its next payment due the organization. The contract will also state that the University has no liability in the case of over/underpayments withheld and subsequently remitted to an organization.
7. Deductions mandated by the state and federal governments will automatically be allowed.

 Garnishments - The University is subject to receipt of wage garnishments for payroll deduction of legally mandated debt obligations. A wage garnishment is a court order to withhold wages from an employee who has outstanding debts.

1. Garnishments are applied to the wages earned in the pay period during which garnishment summonses are served.
2. Up to 25% of an employees disposal income may be withheld per pay period.
3. Amounts withheld from an employeeÕs wages are computed using various formulas prescribed by garnishment laws.
4. Garnishment summonses are not honored if the garnished employee is presently on the Federal Wage Earners Plan, Chapter XIII of the Bankruptcy Law.
5. Garnishment summonses are applicable to an employeeÕs wages accrued prior to the date of filing a petition in bankruptcy. Wages earned following the filing of the petition in bankruptcy are not subject to garnishment.

 The University is obligated to honor all Ònotice of levyÓ documents received, based on Chapter 64 of the 1954 Internal Revenue Code. This type of levy is used to divert wages earned by an employee to the IRS to be applied against an unpaid tax liability. The Ònotice of levyÓ is a continuous levy and is applicable to the net wages, or a portion of them, available for the pay period in which it was received.

Bankruptcies

 The University is obligated to honor notices of bankruptcy filings received from referees in bankruptcy. It must compute and report any wages earned up to the date of the employeeÕs bankruptcy filing to the referee in bankruptcy. If any wages are unpaid, the actual amount is forwarded to the referee along with the reply. Bankruptcy actions take precedence over a garnishment summons on wages earned up to the date of bankruptcy filing. Wages earned following the date of bankruptcy filing are not in any way encumbered by the bankruptcy.

 UNCLAIMED CHECKS

 If the employee has left the University, departments are responsible for mailing the payroll check to the employeeÕs forwarding address. If the forwarding address is not known, the payroll check should be returned immediately to Payroll Services for attempts to locate the employee and subsequent forwarding of the payroll check. After five years, unclaimed checks will be forwarded to the State of Minnesota, pursuant to M.S. 345.311.