On-demand payrolls will now be processed based on a regular schedule. The standardization of the on-demand payments processing allows OMES to better manage its workload as well as set reasonable expectations with agency partners. As always, we encourage agencies to allow the retro process to pull in any prior period transactions to pay on the next payroll. On-demands payrolls should not be processed while the main payroll is in process because it causes issues with recalculations and reconciliations for both the agency and OMES.

OMES will process on-demand payrolls on Mondays and Wednesdays each week unless the Monday/Wednesday conflicts with a published monthly, supplemental monthly or biweekly payroll processing day or a holiday. If there is a conflict, the on-demand payroll(s) will be processed the following business day. If there is a need for a payment outside of this published schedule, an agency may appeal to the OMES Payroll director for an exception. An on-demand processing exception request form will then need to be completed by the agency, signed by the agency director or chief financial officer and submitted to OMES.

Agencies should be running RPT00333 to identify employees with incomplete I-9 processing. Once identified, steps should be taken to ensure the I-9/E-Verify process is timely completed. If any issues or errors are encountered with the E-Verify process, including a tentative nonconfirmation (mismatch), submit a service ticket for assistance.

As a reminder, the I-9/E-Verify process is used to verify the identity and employment authorization of individuals hired for employment in the United States. In accordance with federal law, the employee must complete Section 1, Employee Information and Attestation, no later than the first day of employment. Section 2, Employer Review and Verification, must be completed within three business days after the employee’s first day of employment. The E-Verify process must begin no later than the third business day after the employee starts work for pay. For example, if the employee begins work for pay on Monday, the information must be entered in Workday@OK and the E-Verify case created by Thursday of that week. Failure to comply could result in penalty assessment to the State of Oklahoma as the employer.

Agencies are encouraged to promote electronic only access to year-end forms. The following information is provided to distribute to employees.

To avoid waiting for your 2024 Form 1095-C or your 2024 W-2 to arrive by mail, you can opt to go paperless only. When you choose to go paperless only, you will receive an electronic copy of the documents that can be downloaded and printed earlier than if electing both paper and electronic. Once you select to receive an electronic only copy, you do not need to make the selection again in the future. A 1095-C user guide and a W-2 user guide have been created to assist you in opting out of receiving the documents by mail. Those who have elected to receive both electronic and paper copies for their year-end documents will have them mailed by the required deadlines. Electronic versions will also be available by the deadlines. W-2s are due to employees by Jan. 31, 2025. 1095-C forms are due by March 3, 2025.

Agencies are reminded to double-check any executive-level or unusual requests for lists of Forms W-2 or Social Security numbers. Cybercriminals continue to trick payroll and human resources officials by disguising emails to make it appear as if it is from an organization executive. An email is sent to an employee in the payroll or human resources departments requesting a list of all employees and their Forms W-2. The thieves then attempt to file fraudulent tax returns for tax refunds and/or post the information for sale on the darknet. Personnel should pay close attention to the email address of the sender and confirm requests for any sensitive data verbally, using previously known phone numbers or in-person.

As part of the 2017 Security Summit effort, the Don’t Take the Bait education series focused on raising awareness of the critical need for increased computer security and caution when reviewing email inboxes – specifically email scams that identify themselves as a friend, customer or company. The series can be viewed on the IRS website. In addition, the Security Summit continues to meet annually to address areas of need and help raise public awareness. More information can be found here.

The IRS continues to investigate phishing emails. If an agency receives an email of this type, immediately contact Lisa Raihl at 405-521-3258 or Jean Hayes at 405-522-6300.

Agencies continue to increase the number of state employees who work remotely and need to be cognizant of withholding and reporting requirements for these employees. With employees working remotely outside of Oklahoma, the state, as the employer, is required to withhold and submit income taxes to that state and report unemployment and other wages/taxes, as applicable. If an agency has employees working outside of Oklahoma, the work location needs to be updated to the state where the employee is physically working. The employee tax elections need to be timely updated to reflect the new tax jurisdication for income tax and unemployment withholding/reporting purposes.

Please help communicate these requirements to agency HR recruiting and onboarding personnel as many tasks are performed or initiated by them. Although OMES Central Payroll processes the actual payments and reports to the other states, agency personnel must be familiar with the requirements for any state in which employees are hired. Contact OMES Central Payroll with any questions concerning employees working out of state.

Note: This does not apply to higher education institutions

Agencies that have received HSA refund audits from OMES Benefits should process the employee refunds as soon as possible but no later than on the last paycheck of this calendar year.

• For audits refunding 2024 HSA withholdings, processing the refund in the same calendar year will prevent the agency from having to complete a W-2C. If refunds are processed in calendar year 2025, agencies will be responsible for completing W-2Cs for those employees.
• For audits refunding prior year HSA withholdings (2023 or earlier), agencies are responsible for completing W-2Cs for those employees after the refund has been processed. Employees should receive their copies of the W-2C, and Copy A will need to be sent to OMES Central Payroll. Contact Jean Hayes at 405-522-6300 or jean.hayes@omes.ok.gov or OMES Central Payroll with any questions.

This is a partial reprint of our article from October to serve as a reminder for the remaining November holidays.

In planning your work for November, Veterans Day will be observed on Monday, Nov. 11. The Thanksgiving holiday is recognized on Thursday and Friday, Nov. 28-29. November biweekly payroll for state agencies is paid on Friday, Nov. 1, Friday, Nov. 15 and Wednesday, Nov. 27. November monthly payrolls will be paid on the last working day of the month, Wednesday, Nov. 27.

With these dates in mind, agency staff should plan their work accordingly for the deadlines:

SUPPLEMENTAL: Workday@OK supplemental payrolls are set to pay on Tuesday, Nov. 12. Agencies must have these payrolls processed and paperwork forwarded to OMES by Monday, Nov. 4.

BIWEEKLY: Biweekly payrolls are set to pay on Friday, Nov. 1. Agencies must have these payrolls processed and paperwork forwarded to OMES by Friday, Oct 25.

The next biweekly pay date is Friday, Nov. 15. Agencies must have these payrolls processed and paperwork forwarded to OMES by Thursday, Nov. 7.

For the Wednesday, Nov. 27, biweekly pay date, agencies must have these payrolls processed and paperwork forwarded to OMES by Wednesday, Nov. 20.

MONTHLY/LEGISLATIVE MONTHLY: Monthly payrolls will be set to pay on Wednesday, Nov. 27. Agencies must have these payrolls processed and paperwork forwarded to OMES by Wednesday, Nov. 20.

Gifts to employees is restricted and should only be given as part of a formal employee recognition program. See 74 O.S. §§ 4121 and 4122. Furthermore, any gift cards, certificates or coupons given to employees are to be included in the employee’s taxable income. The IRS considers these items cash or cash equivalent; they do not meet the requirements to be excludable as a de minimis fringe benefit.

Even when an employer provides gift cards, certificates, or coupons to purchase a turkey, ham, or other nominal value property, these are considered wages and are subject to income and employment taxes. This is true even when the card restricts the items purchased, the time to use the coupon, and any unused portion is forfeited. Cash equivalents do not meet the de minimis fringe benefit requirements.

Agencies needing assistance with processing non-cash taxable fringe benefits in Workday@OK: Submit a ticket in ServiceNow and email HRMSWorkdaySupport@omes.ok.gov with a copy of the request item number.

The OMES Form PWC should only be used when an employee is not entitled, in part or whole, to the funds. All PWC forms OMES receives will initiate the process to retrieve the funds, if direct deposit, and cancel the warrant in the payroll system. It is imperative that agencies identify payroll errors and process the form immediately upon discovery.

Paper warrant cancellations: Email Form PWC to payrolltransprocess@omes.ok.gov. Scan the original warrant (marked void) and attach to the email. However, OMES will process the cancellation without the scanned copy if the email certifies the agency has the warrant and can provide it when circumstances allow. If physically sending the paper warrant and form, the original warrant must be marked “Void” and attached to the completed Form PWC and sent to OMES Central Payroll, located in the Lincoln Data Center (LDC), 3115 N Lincoln Blvd, Ste 2059, Oklahoma City, OK 73105-5400. These requests cannot be processed by fax.

Direct deposit cancellations: Email Form PWC to payrollreporting@omes.ok.gov. The document must be password-protected and the password should be included in a separate email or sent via another secure method. To ensure direct deposit funds are returned, the PWC request must be received by noon three business days prior to the effective pay date. Any request for cancellation of direct deposits after that cutoff will be subject to recall or reversal procedures that are subject to denial by the employee’s bank. An employee must be notified in writing of a reversing entry and its reason no later than the effective date of the reversing entry. Notify the employee no later than the day the OMES Form PWC is submitted for processing.

Your agency can modify the statement below and use it to inform your employee(s) of the pending reversal.

“A payroll item will be posted in error to your bank account on MM/DD/YY. A reversal has been issued and will post to your account to pull these funds back to the state. Keep the full amount of this deposit in your account. If the state cannot retrieve the full amount of the deposit, action will be taken in accordance with applicable procedures to retrieve the funds from you.”

Once the funds have been returned to the state, OMES will process a cancellation in the payroll system, which returns the funds to the agency. If the funds cannot be recovered from the bank, the agency is responsible for recovering the funds from the employee. Refer to 74 O.S. § 840-2.19(D) for proper procedures for recovering overpayments, if needed. The agency should submit OMES Form 94P for processing if the employee reimburses the funds through a miscellaneous payroll deduction or cash.

PWC forms received for direct deposit items that are more than four business days past the effective date will not be processed pursuant to NACHA rules. If agencies encounter erroneous entries more than four business days past the effective date, contact OMES Central Payroll for consultation on options for recovering the funds.

Agencies need to review all outstanding employee overpayments and collect required amounts from employees. After collection, submit OMES Form 94P, as applicable. If a refund of taxes is due to the agency, the form must be submitted by Friday, Dec. 13, 2024. After this date, refunds cannot be returned to the agencies; however, agencies are still required to submit the form after this date for employee wage corrections. Corrections due to overpayments will be posted to the employee’s 2024 W-2 for requests submitted through Friday, Jan. 3, 2025. Any corrections submitted after Jan. 3 will require a corrected W-2.

When an employee reimburses a payroll overpayment, complete and submit the OMES Form 94P as soon possible after the reimbursement is made. Timely submission helps ensure corrections are reflected in the quarter in which they occurred for proper reporting and helps in the full recovery of OPERS retirement amounts. If the retirement system is not aware of an overpayment and the pending overpayment refund request, payouts to former employees may be incorrect, resulting in a loss to the agency. In addition, retirement calculations may be incorrect if the overpayment is not reported timely.

Do not provide copies of personal checks or copies of the payslip. The form allows the agency to enter the amount reimbursed. Additional backup data is not required.  

For the privacy and security of the employee, the form requires the state employee ID (EmplID) be entered. Do not submit with the Social Security number or any other number.

Employee overpayments collected in the next calendar year are to be repaid at the gross overpayment amount in accordance with IRS regulations. If an employee owes the agency, notify the employee that if the amount is not paid in full by Dec. 31, 2024, the amount due will increase to the gross amount.

In accordance with 74 O.S. § 840-2.19, the agency must send a notice to the employee within 10 days of identifying an overpayment. The employee then has 30 days to respond to this notification. Employees have several options for repaying overpaid payroll amounts:

• Reduction of annual leave (for the gross overpaid).
• Reduction of current gross salary (for the gross overpaid) in a lump sum or installments over a term not to exceed the term in which the overpayment(s) occurred.
• Lump-sum cash repayment.
• Miscellaneous payroll deduction (for the net overpaid) in a lump sum or installments over a term not to exceed the term in which the overpayment(s) occurred.
• Any combination of the above options.

With the calendar year-end nearing, the collection of any outstanding overpayment is especially important and must be conveyed to employees who owe any monies back to the agency. When an overpayment is reimbursed in a subsequent year, IRS rules state the employee must reimburse at the gross amount because the funds were available for use in the prior year and, as such, they are taxable to that year. Additionally, federal and state wages and taxes cannot be reduced for prior years when repayments are made after the end of that calendar year.

For example, John Doe was overpaid in August by $1,000 regular wages. This was discovered in September, and the agency calculated what the correct payroll should have been. The net check difference is $743.50, the amount the employee owes the agency if making the reimbursement by personal check or miscellaneous deduction in the current year. If the employee does not reimburse the net amount by Dec. 31, 2024, the employee owes the agency the full $1,000 gross overpayment.

If the employee reimburses the entire gross amount after year end, the applicable W-2, corrected W-2 or W-2C will only reflect a change in the Social Security and Medicare wages and taxes. Since the employee received and had use of the funds during the year of overpayment, the amount is still taxable for federal and state purposes. The W-2 form will not correct federal or state taxable wages or income taxes. The employee may be entitled to either a deduction or credit on their current year Form 1040 and should be advised to speak to their tax accountant.

When an employee chooses to reimburse an overpayment using annual leave, the amount of annual leave reduced should equal the gross amount of the overpayment.

If an employee reimburses an overpayment using terminal leave, an OMES Form 94P must be submitted to correct the retirement amounts reported on the check that included the overpayment. Terminal leave is not included in retirement wage calculations; therefore, a payroll adjustment is required.

Agencies must complete Form DER, Deceased Employee Reporting, when an employee has passed away and payments are made after the date of death. The form is on the OMES HCM Human Resources Payroll Forms page. Complete all forms and send to OMES Central Payroll as soon as possible after all payments have been processed. Submission of this form will ensure year-end reporting is correct.

Note: This does not apply to higher education institutions.

Amounts paid in the year of death are reported on the W-2 for Social Security and Medicare only. The amount that would have been reported as federal and state wages is required to be reported on a 1099-MISC to the individual(s) who received the payment(s). Payments made in the year after the date of death are not subject to Social Security and Medicare and are not reported on the W-2. The amount that would have been reported as federal and state wages is reportable on a 1099-MISC to the individual(s) who received the payment(s).

The Workday@OK Deceased Payroll Process guide assists in processing payments after the date of death.

Note: Put the term reason due to death: Terminate Employee> Involuntary>Death. Due to the timing of the deposit and date of death, banks may return direct deposits for deceased customers. A return of an item will cause a delay to the beneficiary receiving the payment.

Note: Let recipients know that they will be issued a 1099-MISC at year-end and that the amounts will be reported to the IRS and OTC. This will assist them in tax planning.

40 O.S. § 165.3a allows employers to provide employees the option of designating a beneficiary for wages and benefits payable upon an employee’s death. There is no requirement for an employer to allow employees to select beneficiaries, but agencies may want to consider adopting such a policy. Providing the option to employees relieves stress and anxiety on family members after the employee's death. It also provides clear guidance on who is to receive final wage payments.

This statute does not include any longevity payment that may be due as of the date of death of an employee. 74 O.S. § 840-2.18(H)(2) authorizes any longevity payment to be paid to the decedent’s surviving spouse, or to the decedent's estate, if there is no surviving spouse.

For more information or sample forms and instructions, email OMES Central Payroll.

Note: This does not apply to higher education institutions.

The HCM system correctly calculates taxes based on the current tax rates and an employee’s withholding certificates. Agencies should not override the taxes calculated. If the taxes appear to be incorrect, the employee's paycheck should be reviewed before continuing the payroll process. If the taxes prevent after-tax deductions from being withheld, the employee should be notified. Payment of items not withheld through payroll due to lack of net pay must be settled between the employee and the vendor. 

Verify the correct agency address is being used in Workday@OK. The agency address can be found on the Employee’s Earnings Statement. If the address is not correct for the agency, this must be updated before year-end processing of tax forms. Contact the OMES Service Desk to have the agency’s address updated.

All 1099 forms will be distributed as an Adobe PDF file through email, between Jan. 14-17, 2025.

Email your agency contact information to OMES Central Payroll with the following details for a primary and alternate contact:

• Agency number.
• Agency name.
• 1099 Contact name.
• 1099 Contact phone.
• 1099 Contact email.

Note: This does not apply to higher education institutions; they will process their own 1099 reporting.

Agencies will be responsible for printing all 1099 Forms.  All 1099 forms can be printed on traditional 8½ x 11 white paper.  The forms can be trifolded and will fit in a Standard No.10 windowed envelope. Sample printed forms can be provided if requested. For sample forms, contact Alicia Reel at 405-522-1099 or alicia.reel@omes.ok.gov.

Note: This does not apply to higher education institutions; they will process their own 1099 reporting.

With the new age of social media, agencies may be using social media influencers as part of their overall marketing strategy.  This type of service creates an independent contractor relationship and as such any payments by cash or noncash methods are considered payments for services. Influencers often receive free gifts or services such as trips, accommodations, food, or swag, in exchange for their social media posts promoting the agency. Gifts or services related to this type of relationship are considered taxable income when the cumulative value to an individual influencer is $600 or more during a calendar year.

The agency will need to obtain the influencer’s taxpayer identification number using the IRS Form W-9, Request for Taxpayer Identification Number and Certification, for the income to be reported on Form 1099-NEC. For any noncash income to be reported for 2024, the 1099 Detail File Format spreadsheet must be completed and submitted no later than Tuesday Jan. 7, 2025. If you have any questions, contact Alicia Reel at 405-522-1099 or at alicia.reel@omes.ok.gov.

Note: This does not apply to higher education institutions; they will process their own 1099 reporting.

The year end 1099 Report is available for each agency to run in PeopleSoft Financials at any time. The path for this report is Accounts Payable>Reports>Payments>Misc Tax Information Report. 

Make sure the dates include 01/01/2024-12/31/2024.  This report will reflect the 1099 data from PeopleSoft vouchers. Be advised that any vendor with a 1099 Flag of N on the report will not receive a 1099 unless they are paid using a medical or legal account code.

The final report should be processed by agencies no later than Jan. 3, 2025, or preferably by Dec. 31, 2024.  

For changes to a Vendor 1099 Flag, agencies must submit an updated W9 from the vendor to OMES Central Purchasing Supplier Registration through the Update 1099 request in ServiceNow. Submit corrections to OMES by Jan. 7, 2025.

Note: This does not apply to higher education institutions; they will process their own 1099 reporting.

In planning your work for November, it is important to remember Veterans Day will be observed Monday, Nov 11. The Thanksgiving holiday is recognized on Thursday and Friday, Nov. 28-29. With these dates in mind, please adjust your payroll processing schedules as needed. All payroll documents must be received five business days prior to the actual pay date to ensure adequate time for audit and processing.

OMES Central Purchasing launched our service request platform in the state's work management system, ServiceNow, on Oct. 21 for supplier/payee registration requests. This transition replaces our shared emails to improve efficiency in handling and tracking all requests submitted to our team. The platform offers a more customized experience and includes metrics to help us enhance the quality of our service.

The following email addresses are no longer monitored:

• supplier.registration@omes.ok.gov.
• payee.registration@omes.ok.gov.
• eft.registration@omes.ok.gov.
• payee.update.request@omes.ok.gov.

Instead, an autoreply will direct users to ServiceNow for service requests or inquiries.

Affiliate agencies and higher education institutions

Affiliates and institutions of higher education may register in ServiceNow with an email and password, then verify the email to access and use the service catalog. Once the account is verified, the available services are:

• Supplier name change.
• Preapproved exception classification update.
• 1099 update.
• Registration general questions. 

Suppliers and payees

Suppliers and payees may email oksuppliers@omes.ok.gov to submit inquires or request assistance or contact Supplier Registration at 405-521-2930 from 9 a.m.-4 p.m. CST, Monday through Thursday. These contact methods are intended for suppliers only. State agency staff must submit a ServiceNow ticket. This allows our team the ability to provide timely customer service to our state suppliers and payees. The OMES Central Purchasing website, supplier and payee guides and other relevant information sources have been updated to reflect the new contact information for suppliers to use.