CAR Newsletter - November 2020
Payroll during the PeopleSoft Financials upgrade
While Human Capital Management will not be down, PeopleSoft Financials will not be available to add combo codes (if needed) until Nov. 12. Biweekly payroll state agencies should encourage employees to enter this weeks’ time early. We recommend employees enter time daily and managers approve time daily during this pay period to enable a quick turnaround for payroll processing. Agencies should run Time Administration daily to identify any combo code errors as they occur and request new ones as needed before the system becomes unavailable. The payroll deadline for the biweekly payroll that spans the system outage will be extended to 10 a.m. on Tuesday, Nov. 17 (instead of the previous Friday). In addition, the following is affected:
Processors will be able to perform many, but not all, of the payroll steps in HCM while the PeopleSoft Financials system is unavailable. Security will stop users from being able to perform steps beginning with the Run Pre-Distribution Audit Report (CA) process. This step and the remaining ones will not be available until after the PS Financials system is up and running by 10 a.m. on Thursday, Nov. 12. In addition, the step Run Pre-Funding Reports (CA) should not be run. With PS Financials down, the current budget data in general ledger will be unavailable.
H voucher processing
Off-cycle and supplemental payrolls that pay on Thursday, Nov. 12, must be provided to Transaction Processing by Wednesday, Nov. 4. This allows the agency time to complete the PY to AP Extract process and for the nightly AP Voucher Post batch process to run and the vouchers to be processed for payment.
Example: Payroll is completed on Wednesday, Nov. 4, and the PY to AP process is run along with the nightly AP Voucher Post batch process. On Thursday, Nov. 5, agencies can reconcile, build the vouchers and submit to Transaction Processing. The vouchers would process for payment on Friday, Nov. 6.
NOTE: If vouchers submitted on Friday, Nov. 6, will not process for payment until after the upgrade, on Thursday, Nov. 12.
Institutions of Higher Education
Institutions with biweekly payrolls to pay on Friday, Nov. 13, must have payroll to OMES no later than 3 p.m. on Thursday, Nov. 5, for it to be released to pay on Nov. 13. With the Veterans Day holiday, this meets the five-business day rule and allows for institutions to finalize any other payments required before PS Financials is taken down Friday evening.
The payroll deadline for the biweekly payroll that pays on Friday, Nov. 20, has been extended to 10 a.m. on Tuesday, Nov. 17 (instead of the previous Friday).
PeopleSoft Financials upgrade processing reminders
The upgrade live date is approaching and you need to be aware of some processing instructions. Please review this information and make the necessary changes to your processes during the week of the upgrade.
The upgrade process begins the evening of Friday, Nov. 6, and spans through the Veterans Day holiday on Nov. 11. The system will be unavailable for use beginning at 5 p.m. on Nov. 6 through Nov. 11. The upgraded system will be up and running by 10 a.m. on Thursday, Nov. 12.
Prepare for system to be down! Agencies should think ahead and plan for the two business days PeopleSoft will be unavailable.
Purchasing and disbursements: Take care of POs or vouchers before the close of business on Nov. 5.
P-card: The deadline for editing, download, voucher build and submission of P-card vouchers is Nov. 5. We recommend transactions be coded and signed off daily in preparation of this shortened deadline.
Payroll: While HCM will not be down, PeopleSoft Financials will not be available to add combo codes (if needed) until Nov. 12. The payroll deadline for the biweekly payroll that spans the system outage will be extended to 10 a.m. on Tuesday, Nov. 17 (instead of the previous Friday). Biweekly payroll agencies should encourage employees to enter time early. We recommend employees enter time daily and managers approve time daily during this pay period to enable a quick turnaround for payroll processing. Refer to the previous article for additional details.
Deposits: All agencies making deposit entries into PeopleSoft on Nov. 12 should enter their deposits from Nov. 9-10 separately to match the deposits made at the bank. They should not combine these deposits into one deposit entry when keying into PeopleSoft. In addition, agencies making large deposits ($100,000 or more) at the bank on Nov. 9, 10 or 12 should notify OST (firstname.lastname@example.org) and the bank of the amount as soon as possible so OST can manage any collateral requirements.
Training – While you are not likely to notice a difference in the work you do within the PeopleSoft modules, the navigation to get there will be different. OMES has already held a live demo of the navigation and is preparing videos to be available on the OMES website this week.
Practice opportunity – Users can explore the navigation in the test environment. Use the login credentials you had on Oct. 6.
We look forward to working in the more updated environment and to further enhancements to be implemented as a result.
November Cash Allocations
Due to the State Accounting System being unavailable on November 10th for monthly cash allocations, the entries allocating the cash to the appropriated agencies will not be posted until November 12. We will post them as early as possible, but if you have an urgent need, please contact the CAR accounting group (email@example.com) if you are experiencing issues with the delay in the cash allocation posting.
Deadlines for November payrolls
In planning your work for November, it is important to remember Veterans Day is Wednesday, Nov. 11. Thanksgiving is recognized on Thursday, Nov. 26, and Friday, Nov. 27, is also a state holiday. November biweekly payroll for state agencies (B or C biweekly schedules) will be paid on Friday, Nov. 6, and Friday, Nov. 20. November monthly payrolls will be paid on the last working day of the month, Monday, Nov. 30.
With these dates in mind, agency staff should plan their work accordingly for the deadlines:
SUPPLEMENTAL: PeopleSoft supplemental payrolls are set to pay on Thursday, Nov. 12. Agencies should have these payrolls processed and paperwork forwarded to OMES by Wednesday, Nov. 4. Refer to the TOP STORY above for additional information.
BIWEEKLY: B and C biweekly payrolls are set to pay on Friday, Nov. 6. The next biweekly pay date for B and C biweekly schedule agencies will be Friday, Nov. 20. Agencies should have these payrolls processed and paperwork forwarded to OMES by 10 a.m. on Tuesday, Nov. 17. Refer to the TOP STORY above for additional information.
For the Friday, Dec. 4, biweekly pay date, agencies should have these payrolls processed and paperwork forwarded to OMES by Wednesday, Nov. 25.
MONTHLY: Monthly payrolls will be set to pay on Monday, Nov. 30. Agencies should have these payrolls processed and paperwork forwarded to OMES by Thursday, Nov. 19.
W-2 reporting of Families First Coronavirus Response Act wages
The IRS requires W-2 form reporting for qualified sick and family leave wages paid to employees under the Families First Coronavirus Response Act. All agencies should report the Emergency Paid Sick Leave and Extended Family Medical Leave wages through the HCM system with the correct earnings codes. Please be sure to report all wages correctly before the end of the calendar year. This required reporting provides employees who are also self-employed with information necessary for properly claiming qualified sick leave equivalent or qualified family leave equivalent credits under the Families First Act.
Employee Benefits Department – PeopleSoft deduction/trailer codes
Taxability of gift cards, certificates and coupons
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 Internal Revenue Service 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.
In the HCM system, process the gift card amount using the TRC code “GIFT,” which will show as earnings code “GFT.” The amount will be included as taxable income and will be taxed on the paycheck.
OMES Form PWC, payroll warrant cancellation
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 firstname.lastname@example.org. 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 Transaction Processing. These requests cannot be processed by fax.
Direct deposit cancellations:
Email Form PWC to email@example.com. 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. Please 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. Please 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. Please 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 five business days past the effective date will not be processed pursuant to NACHA rules. If agencies encounter erroneous entries more than five business days past the effective date, please contact OMES or OST for consultation on options for recovering the funds.
Refunds of taxes for overpayments to employees (Form 94P)
Agencies need to review all outstanding employee overpayments and collect required amounts from employees. After collection, please submit OMES Form 94P, as applicable. If a refund of taxes is due to the agency, the form must be submitted by Friday, Dec. 18, 2020. 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 2020 W-2 for requests submitted through Wednesday, Jan. 6, 2021. Any corrections submitted after Jan. 6 will require a corrected W-2.
Submission of OMES Form 94P
When an employee reimburses a payroll overpayment, please complete and submit OMES Form 94P as soon as the reimbursement is made. Timely submission helps ensure corrections are reflected in the quarter in which they occurred for proper reporting and also helps in the full recovery of Oklahoma Public Employees Retirement System 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.
Please do not provide copies of personal checks. The form allows the agency to enter the amount reimbursed. Additional backup data is not required.
The form requires the state employee ID be entered. This is for the employee's privacy and security. Please do not submit with the Social Security number or any other number.
Employee overpayments collected after year end
Employee overpayments collected in the next calendar year are to be repaid at the gross overpayment amount in accordance with Internal Revenue Service regulations. If an employee owes the agency, notify the employee that if the amount is not paid in full by Dec. 31, 2020, 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, 2020, 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.
Reduction of annual leave hours for overpayments
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 earnings adjustment is required.
Deceased employee payroll processing and reporting
Agencies must complete Form DER when an employee dies and payments are made after the date of death. The form is on the OMES website under CAR Forms. Complete all forms and send to firstname.lastname@example.org as soon as possible after all payments have been processed.
Procedures for processing payroll after the death of an employee are available in the OMES HCM how-to document titled Payroll Processing For Death of an Employee.
NOTE: Remember to update the date of death on the HR Personal Data Record, update Job Data for a termination with the reason code SO4 (deceased) and terminate the employee’s direct deposit. Banks will return direct deposits for deceased customers. A return of an item will cause a delay to the individual receiving the payment.
Outstanding wages beneficiary designation option
Statute 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, subsection 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, please email email@example.com.
W-2 reporting of employer-sponsored Group Health Insurance
Beginning in 2012, the IRS mandated Box 12 reporting for the cost of employer-provided health coverage. The W-2 must show the amount in Box 12 with Code DD.
To correctly report the cost of health coverage, all payments made for health insurance must process through the payroll system. Failure to process through payroll will result in incorrect reporting on the W-2. For help establishing the appropriate deduction codes, state agencies should contact the OMES Service Desk at 405-521-2444 or at firstname.lastname@example.org.
As a reminder, this reporting to employees is for their information only. The amount reported is not taxable and is only intended to inform them of the cost of their health care coverage.
State HCM system use of addresses on W-2s
As a reminder, in the HCM system, the W-2 process loads the employee’s mailing address for IRS Form W-2 reporting. If there is no value in the mailing address field, then the employee’s home address will be used on the W-2. If there is a value in the mailing address field that is not to be used on the Form W-2, it must be updated or inactivated.
State HCM system use of addresses on 1095-C, ACA reporting form
The 1095-C form process in the HCM system has been set to load the employee’s mailing address just as the W-2 process does. If there is no value in the mailing address field, then the employee’s home address will be used on the W-2. If there is a value in the mailing address field that is not to be used on the Form W-2, it must be updated or inactivated.
Agency address verification
Please verify the correct agency address is being used on the HCM system. The agency address is 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. Please call the OMES Service Desk at 405-521-2444 to have the agency’s address updated in the HCM system.
PeopleSoft mail drop for year-end processing
The HCM system employee W-2 and 1095-C forms are processed and printed in mail drop order. Please ensure this field is properly used for employees. The forms will print in the same order as checks and advices sort, based on each agency’s needs.
State agency W-2 forms will be printed from the PeopleSoft HCM System. The format for the W-2 forms will be the same as that used last year. Envelopes that fit the 2019 PeopleSoft W-2 forms should fit the 2020 W-2 forms.
The format for the 1099 MISC forms is the same as last year. The forms will have three sections, with the top and middle sections of the page containing the two copies of the form and the bottom section of the page containing mailing addresses. Instructions will print on the back of the form. Standard No. 9 or No. 10 envelopes with left windows should work. The new 1099-NEC for will also fit the envelopes.
Sample printed forms of the PeopleSoft W-2, 1099 MISC and 1099-NEC can be provided if requested. Please contact Jean Hayes at 405-522-6300 or email@example.com or Alicia Reel at 405- 522-9479 or firstname.lastname@example.org.
NOTE: This is not applicable for the Institutions of Higher Education due to the fact that they are responsible for their own year-end reporting.
HIGHER EDUCATION ENTITIES
November payroll deadlines
In planning your work for November, it is important to remember that Veterans Day is Wednesday, Nov. 11. Thanksgiving is recognized on Thursday, Nov. 26, and Friday, Nov. 27, is also a state holiday. 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.
NOTE: With the Financial upgrade, any biweekly payrolls to pay on Friday, Nov. 13 must be to OMES no later than 3 p.m. on Friday, Nov. 6, for them to be released to pay on Nov. 13. See the TOP STORY above for additional information.
Voucher documentation and scanning
n Nov. 15, OMES will resume the requirement to attach documentation to support vouchers and travel and expense claims prior to payment. Central Accounting & Reporting is responsible for certifying that payments are appropriate and in accordance with statutes. This requires that documentation be sent with vouchers to substantiate claims. In March, when state employees began working from home, CAR initiated temporary procedures to accommodate a fast move to telework. The temporary procedures allowed agencies to submit vouchers without scanning and attaching the supporting documentation. Agencies were to retain the documentation to be made available upon request. This documentation is now required to be submitted as agencies should have put procedures in place to scan documentation for vouchers that were paid without supporting documents.
New lost/destroyed warrant replacement requirement
Beginning Nov. 16, agencies submitting warrant replacements of lost/destroyed warrants will be required to submit the OST Stop Payment Confirmation along with the OMES 20R. An updated OMES 20R will be available on our website that has the Stop Pay Date section removed from the form.
Out-of-state travel moratorium
As a reminder to all agencies per the Governor's Executive Order 2020-20, there is a moratorium on all out-of-state travel paid in whole or in part by the State of Oklahoma. The moratorium first appeared on Executive Order 2020-07, Fifth Amended, dated March 27, 2020, and again on Executive Order 2020-13. Any out-of-state travel that occurs during the moratorium must have prior approval from the governor’s office. The approval must be submitted as supporting documentation with any travel reimbursement request. For any questions concerning this section of the executive order, or contact information for the governor’s office, please contact OMESTPTravel@omes.ok.gov.
Central purchasing act reform
The Central Purchasing Act reform provisions passed in SB1422 are effective Nov. 1, 2020. One of the provisions raises the "fair and reasonable" threshold from $5,000 to $25,000. Agencies may also request an increase to the agency purchasing thresholds ($100,000, $150,000 or $250,000) and Purchase Card (P-card) thresholds ($10,000 or $25,000) through an application process and by meeting certain criteria. For a request to increase an agency's purchasing threshold to $150,000 or $250,000, an agency will be required to have a minimum of one Level 2 CPO. This is a new CPO certification designation. A CPO announcement will be sent to agencies once the threshold application link is available as well as the CPO Level 2 application link.