Car Newsletter - November 2021
Volume 32 | Number 5 | Fiscal Year 2022 |Nov. 10, 2021
In This Issue ...
- BrightPath Information for Finance and Payroll
- GASB 87 Assistance
- Funds Lapsing
- Payroll Fraud Attempts
- Health Savings Account Refund Audits – Payroll Processing
- Deadlines for November Payrolls
- Employee Benefits Department – PeopleSoft Deduction/Trailer Codes
- Taxability of Gift Cards, Certificates and Coupons
- OMES Form PWC, Payroll Warrant Cancellation
- Refunds of Taxes for Overpayments to Employees (Form 94P)
- Submission of OMES Form 94P
- Employee Overpayments Collected After Year-End
- Reduction of Annual Leave Hours for Overpayments
- Deceased Employee Payroll Processing and Reporting
- Outstanding Wages - Beneficiary Designation Option
- State HCM System Use of Addresses on W-2s
- State HCM System Use of Addresses on 1095-C, ACA Reporting Form
- Agency Address Verification
- PeopleSoft Mail Drop for Year-End Processing
- November Payroll Deadlines
- Early Payment Discount Reports
- Affordable Care Act Form 1095-C Distribution Updates
- American Payroll Association Monthly Lunch & Learn – OKC Chapter Meeting
- Payroll Law
- Form I-9 E-Verify Webinars
BrightPath Information for Finance and Payroll
The implementation of Workday for HR and Payroll is moving along well. We are currently in the project’s end-to-end testing phase where the BrightPath team is working to identify and resolve any defects as configuration is finalized. A customer confirmation session was scheduled for statewide payroll and finance staff for Nov. 10 to demonstrate future functionality and processes.
If you have questions or comments about that session or if anything not addressed has come to mind, please email email@example.com. Here are some things to remember as we move forward:
- Submitting payroll by the deadline will be even more important after we go live with Workday because all payrolls with the same frequency are submitted together (except for project-based agencies).
- Agencies should begin to communicate that employees must enter their time quickly in Workday; managers must review and approve entered time to give payroll processors time to complete their work.
- Finance and payroll need to be in sync. It is important that funding issues encountered in the payroll process are addressed quickly and that cross-training and back-ups are available when staff are out of the office.
- Each agency should have a designated change agent who works with the project implementation team to facilitate spreading the word about BrightPath to employees. Please refer to BrightPath change agent list for information on who the change agent is at your agency. If your agency is not receiving change agent communications, please email firstname.lastname@example.org.
We will keep you posted on the status of the project in future newsletters and look forward to providing state employees with a robust HR and payroll system. For additional information about the BrightPath project, visit brightpath.ok.gov.
GASB 87 Assistance
The OMES Financial Reporting Unit will hold biweekly informational sessions regarding lease reporting required with the implementation of GASB Statement 87. Agency personnel involved with the preparation of the GASB 87 template are encouraged to attend and share questions or concerns that arise during the process. Those with no feedback to share are still welcome to attend to see what other agencies may have learned.
These meetings will be held using Teams, and OMES financial reporting analysts along with the software development team will be available to answer any questions that arise in the gathering of lease data. All meetings will be at 2 p.m. on Wednesdays until the deadline for returning the GASB 87 template (Dec. 17, 2021). The remaining meetings are:
- Nov. 17.
- Dec. 1.
- Dec. 15.
If you have not already received a link to the meeting and would like to attend, please contact your financial reporting analyst.
This is one last reminder that agency appropriated funds lapse on Nov. 21. Fiscal appropriations lapse on Nov. 15.
Payroll Fraud Attempts
Remember to be cognizant of fraudulent attempts to change employee banking information. The issue is still ongoing, and agencies need to be aware when receiving requests to update payroll information. To avoid processing fraudulent information, you must verify any attempts for payroll changes.
Immediate steps to take:
- Agencies must pull all Payroll Change/Direct Deposit forms from their public websites and move the forms to an intranet or distribute by direct employee request only.
- Until otherwise notified, personnel who handle employee payroll direct deposit procedures should verify ALL requests for changes to direct deposit by personally contacting the employee by phone and verifying information such as employee ID number, employment start date, etc. Do not contact the employee by responding to an email requesting the change. Do not contact the employee at a phone number listed in the email unless it agrees with the phone number you already have on file for that employee. Make direct contact and ensure you are actually communicating with the employee and not someone posing as the employee.
- Set a time delay when changing direct deposit information to decrease the chance of wage theft.
Call the OMES Service Desk at 405-521-2444 or contact the appropriate IT or security support for your organization if you receive a suspicious phone call or email.
Health Savings Account Refund Audits – Payroll Processing
Agencies that have received HSA refund audits from OMES/Benefits should process the employee refunds just as soon as possible but no later than on the last paycheck of this calendar year.
- For audits refunding 2021 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 2022, agencies will be responsible for completing W-2Cs for those employees.
- For audits refunding prior year HSA withholdings (2020 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.
Please contact Jean Hayes at 405-522-6300, email@example.com or firstname.lastname@example.org with any questions.
Deadlines for November Payrolls
This is a reprint of our article from October to serve as a reminder for the remaining November holidays.
When planning your work for November, remember Veterans Day is Thursday, Nov. 11. Thanksgiving is recognized on Thursday, Nov. 25, and Friday, Nov. 26, is also a state holiday. November biweekly payroll for state agencies (B or C biweekly schedules) will be paid on Friday, Nov. 5, and Friday, Nov. 19. November monthly payrolls will be paid on the last working day of the month, Tuesday, Nov. 30.
With these dates in mind, agency staff should plan their work accordingly for the following deadlines:
Supplemental: PeopleSoft supplemental payrolls are set to pay on Friday, Nov. 12. Agencies should have these payrolls processed and paperwork forwarded to OMES by Thursday, Nov. 4.
Biweekly: The next biweekly pay date for B and C biweekly schedule agencies will be Friday, Nov. 19. Agencies should have these payrolls processed and paperwork forwarded to OMES by Friday, Nov. 12. For the Friday, Dec. 3, biweekly pay date, agencies should have these payrolls processed and paperwork forwarded to OMES by Wednesday, Nov. 24.
Monthly: Monthly payrolls will be set to pay on Tuesday, Nov. 30. Agencies should have these payrolls processed and paperwork forwarded to OMES by Friday, Nov. 19.
Employee Benefits Department – PeopleSoft Deduction/Trailer Codes
For state EBD insurance purposes in calendar year 2022, please distribute this EBD PeopleSoft deductions list to Payroll and HR directors. Questions can be directed to Jean Hayes at 405-522-6300, email@example.com or firstname.lastname@example.org.
Taxability of Gift Cards, Certificates and Coupons
Gifts to employees are restricted and should only be given as part of a formal employee recognition program. See 74 O.S. § 4121and 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.
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 email@example.com. 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 firstname.lastname@example.org. 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 form is submitted for processing.
Your agency may modify this statement and use it to inform your employee 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 information about 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 Alicia Reel at 405-522-9479, email@example.com or firstname.lastname@example.org, or contact OST for consultation on options for recovering the funds.
Refunds of Taxes for Overpayments to Employees (Form 94P)
Agencies must 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. 17, 2021. 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 2021 W-2 for requests submitted through Friday, Jan. 7, 2022. Any corrections submitted after Jan. 7 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 IRS regulations. If an employee owes the agency, notify the employee that if the amount is not paid in full by Dec. 31, 2021, 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 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, therefore, 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, 2021, 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 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 email@example.com 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 firstname.lastname@example.org.
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. You can find the agency address 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, which is 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 2020 PeopleSoft W-2 forms should fit the 2021 W-2 forms.
The format for the 1099 MISC and NEC 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.
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 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 Veterans Day is Thursday, Nov. 11. The Thanksgiving state holiday is recognized on Thursday, Nov. 25, and Friday, Nov. 26. 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.
Early Payment Discount Reports
Institutions of higher education may discontinue sending OMES quarterly reports showing early payment discounts as long as the institution has a method of obtaining that information if requested.
Affordable Care Act Form 1095-C Distribution Updates
OMES will once again distribute the 1095-C forms via a secure file to agencies during our year-end processing. For us to send the file, we need updated contact information from each agency.
If you have not already done so, please email HCMClassComp@omes.ok.gov and email@example.com with the following information for the agency’s primary and alternate contacts:
- Agency number.
- Agency name.
- ACA contact name.
- ACA contact phone.
- ACA contact email.
American Payroll Association Monthly Lunch & Learn – OKC Chapter Meeting
Topic: Year-end Wrap Up
Date: Friday, Nov.19, 2021
Time: Noon-1 p.m. via Zoom
Visit the APA website for more information.
Live online seminars presented by Fred Pryor Seminars. For more information, please visit the Pryor website.
Form I-9 and E-Verify Webinars
Multiple webinar choices and dates:
Form I-9: An overview of the Form I-9 requirements, including step-by-step instructions on how to complete each section, acceptable documents, retention and storage.
E-Verify overview: An overview of the E-Verify program including how the program works, key features, how to enroll, employer responsibilities, program highlights and a demonstration of the program.
E-Verify in 30: A quick overview of the E-Verify program including what it is, how to enroll and key features.
E-Verify for existing users: A detailed overview of the E-Verify program specifically for existing users. Topics include Form I-9, user roles, creating a case, case alerts, how to handle a TNC and common user mistakes.
For more information on the webinars, please visit the USCIS website. Some of the webinars are eligible for professional development credits with the Society for Human Resource Management and the HR Certification Institute.