PR01 University Payroll

Contents:

• PURPOSE:
• SCOPE:
• DEFINITIONS:
• POLICY:
  • PAY AND PAY DATES:
    • Academic and Salaried Support Staff (Faculty, Exempt, and Non-Exempt):
    • Graduate Assistantsan/Fellows/Postdoc:
    • Part Time, Temporary, and Hourly:
    • Technical Service:

• • SALARY ADVANCES:
  • OVERPAYMENTS:
  • MANDATORY WITHHOLDING(S)/DEDUCTIONS:
    • Retirement:
    • Wage Garnishments:
      • Notifications:
    • Payroll Deductions on Spousal Tuition Charges:
  • PRIORITY OF PAYROLL DEDUCTIONS:
• FURTHER INFORMATION:
• CROSS REFERENCES:
• REVISION HISTORY:

PURPOSE:

To comply with the Office of Budget and Finance mission of providing quality financial, accounting, and information services that foster a culture of responsible stewardship and sound fiscal management of The Pennsylvania State University (University) resources, this policy defines the types of payrolls at the University.

SCOPE:

This policy is applicable to all members of the Penn State community and applies to all locations and operations of the University, including the College of Medicine. Penn State Health and The Pennsylvania College of Technology having separate policies are thereby exempt from this policy. This policy also applies to all University fund types unless otherwise specified.

DEFINITIONS:

• Business Day – a unit of time measure that typically refers to any day in which normal business operations are conducted. This is generally considered to be Monday through Friday and excludes weekends and public holidays.
• Exempt – those professional and administrative staff members who meet the exemption standards of the federal Fair Labor Standards Act. Only absences from normal work schedules must be reported.
• Faculty – academic staff comprising of teachers, lecturers, or professors in an educational institution.
• Non-Exempt – full-time or part-time regular staff members and temporary staff members who do not meet the exemption standards of the federal Fair Labor Standards Act. A record of daily time worked must be generated in the department for each non-exempt staff member.
• OASDI – Old-Age, Survivors, and Disability Insurance commonly referred to as Social Security.

POLICY:

Payroll is dedicated to processing accurate and timely pay for all employees and student workers while adhering to University guidelines, as well as federal and state regulations.

All compensation paid to University employees for services rendered to the University must be processed through the University’s payroll system.

Individuals paid outside of the payroll system for services provided to the university are independent contractors and must meet specific criteria outlined in Policy BS17 Use and Procurement of External Consultants.

PAY AND PAY DATES:

Academic and Salaried Support Staff (Faculty, Exempt, and Non-Exempt):

Employees under these classifications are paid on a monthly basis with the pay period starting from the first to the last day of the month inclusive. Days not included as workdays are Saturday and Sunday. Pay dates are on the last business day of the month.

Graduate Assistants/Fellows/Postdoc:

Graduate Assistants/Fellows/Postdoc are paid on a monthly basis with the payroll period being from the first to the last day of the month inclusive. Days not included as workdays are Saturday and Sunday. Pay dates are on the last business day of the month.

Part-Time, Temporary, and Hourly:

Part time, temporary, or hourly employees are paid on a biweekly payroll basis (i.e.., every other Friday) as shown on the Payroll Calendar.

Technical Service:

Technical Service employees are paid on a biweekly payroll basis (i.e.., every other Friday) as shown on the Payroll Calendar.

Pay schedules and pay dates are posted on the Penn State University Payroll website.

Failure to submit and approve time by the deadline may result in delays in payment to employees.

SALARY ADVANCES:

The Payroll Office is not authorized to provide salary or wage advances. However, if an employee is not paid or not paid correctly due to an error or lack of timely payment authorization, the employee can request their department to initiate a salary advance payment of up to 67% of missed gross pay (in order to replace the approximate net pay after tax and other deductions). The department would request this payment through SIMBA. The Payroll Office will be notified, and the appropriate deduction will be made on the next pay.

OVERPAYMENTS:

On occasion, due to errors in processing, timeliness of submission, and reporting, employees may be paid more than is owed to them. This policy establishes roles and responsibilities for collecting overpayments.

University Payroll has the authority and responsibility to create, implement, monitor, modify, and enforce operating procedures and internal control processes consistent with the policy to ensure reasonable efforts are undertaken by departments to collect overpayments from current and former employees in compliance with the University’s legal obligations.

When a department or an employee becomes aware of a payroll overpayment, University Payroll must be contacted immediately. If the overpayment is reported before pay day, Payroll should make every effort to cancel the direct deposit or paycheck and avoid the overpayment. It is also the departments responsibility to contact the employee (or former employee) to arrange for repayment of the overpayment.

Overpayments must be repaid back to the University.  No employee is entitled to retain any payment exceeding the amount earned.  All salary overpayment collections must occur in the same calendar year as of the overpayment, to property reflect the year-to-date earnings.

Forgiveness of overpayments is not permitted. Any exception must be approved by the Vice President for Human Resources and documented in the employee’s personnel file with an explanation and reason.

MANDATORY WITHHOLDING(S)/DEDUCTIONS:

Standard paycheck deductions include those withholding(s)/deductions that are legally required, such as taxes and wage garnishments. Penn State University is required by law to make certain mandatory deductions from employee paychecks. The standard deductions withheld are OASDI (Social Security); Medicare; state, local and federal taxes; unemployment compensation; and in some states, disability premiums.

Retirement Contributions:

Contributions to the State Employees Retirement System (SERS), Public School Employees’ Retirement System (PSERS) or TIAA plans are required for all benefit eligible employees. Information about retirement is available from the Human Resources Benefits Office. Regardless of the plan chosen, employees are required to contribute a percentage of their income to the retirement plan. All required Penn State retirement plan contributions are tax deferred. Elective contributions under a 403b plan may be Roth contributions, which are taxable.

Retirement contributions are calculated as a percentage of gross pay. Retirement contributions are not subject to federal income tax in the year they are deducted but may be subject to tax if withdrawn.

Wage Garnishments:

Wage garnishments are court orders requiring the University to withhold a predetermined amount from identified individual’s scheduled pay and remitted, by the University, directly to the court or legally authorized agency named in the garnishment order. Examples of garnishments include child support, bankruptcy, tax levies, alimony and student loans. Accounting Operations, a division of the Office of Budget and Finance, is responsible for administering payroll deductions as required by Notices to Withhold Income for Child Support, Tax Levies, and Writs of Garnishment. Wage garnishments are received and processed through Accounting Operations. Any departmental administrator in receipt of an employee-related payroll deduction notice should immediately route it to Accounting Operations. Accounting Operations notifies the identified individual if garnishment activity has been received on their behalf. For questions regarding wage garnishments, please contact Accounting Operations by phone at 814-865-7635 or by fax at 814-865-0533.

Federal and State law place limitations on the amount of deductions that may be taken and determine the priority of claims to be withheld from an employee’s earnings. Nothing in this policy shall impose or limit requirements that may be otherwise imposed by law.

A garnishment continues as long as the person is employed by the University, or until the debt plus interest is paid in full, or a Release of Writ is issued by the court. The University must discontinue the garnishment deduction if a Notice of Bankruptcy for the employee is received.

Notification:

When an employee is no longer employed at the University, Accounting Operations must notify all agencies or creditors who have filed garnishments or wage withholding(s) orders with the University.

Payroll Deduction on Spousal Tuition Charges:

When an employee’s eligible spouse takes graduate level classes, the individual pays 25% of the cost of the class or classes. The remaining 75% covered by the tuition benefit, is considered a taxable benefit under the law. The employer is required to withhold Federal tax, OASDI, and Medicare tax on the 75% that is covered by the employer. In order to minimize the impact on an employee’s pay, the University spreads the taxable benefit over three consecutive pay periods. As a result, the employee’s net pay is decreased due to additional deductions of Federal, OASDI, and Medicare taxes.

PRIORITY OF PAYROLL DEDUCTIONS:

More than one (1) mandated deduction may be required for an employee at any given time. Within the maximum allowable withholding(s) amount, any number of deductions may be taken simultaneously in the order of priority listed below:

1. Taxes (Federal, State, and FICA)
2. Retirement Contributions
3. Child Support
   
   1. Current Amount
   2. Arrears
4. Garnishment(s)
5. Tax Levy (a tax levy can take priority over other creditor garnishments if the University receives a claim of lien filed by the IRS with the County Clerk)
6. Voluntary Deduction (for example, union dues, parking fees, etc.)

FURTHER INFORMATION:

For questions, additional detail, or to request changes to this policy, please contact the Payroll Office, a division of the Office of Budget and Finance.

CROSS REFERENCES:

• Internal Revenue website
• Policy BS17 Use and Procurement of External Consultants

REVISION HISTORY:

Most Recent Changes:

•  February 1, 2023 - Editorial changes:
  • Changed all references to the Associate Vice President for Finance to the Associate Vice President for Budget and Finance, per the directive of the Senior Vice President for Finance and Business.
  • Changed the SME from the name of an individual to their title, per the directive of the Associate Vice President for Budget and Finance.

Revision History (and effective dates):

• January 5, 2023 - Editorial changes.  Changed all references to the Office of the Corporate Controller to the Office of Budget and Finance, per the directive of the Associate Vice President for Finance
• June 9, 2022 - repayment requirement added to Overpayment section
• September 1, 2020 - policy rewritten to address the replacement of institutional legacy computer systems with Workday and SAP/4HANA systems.
• December 6, 2017 - policy under review due to WorkLion implementation
• October 3, 2013 - Editorial changes. Addition of policy steward information, in the event that there are questions or requests for changes to the policy.
• May 29, 2013 - Editorial change; moved reference to policy PR02, because it applies to all four classifications of personnel paid monthly.
• June 14, 2006 - Revision History added.
• June 18, 1997 - incorporated Penn State Hospitality Services terminology
• April 19, 1993 - Changed "Staff Nonexempt and Clerical" to "Nonexempt staff;" revised Ritenour Health Center name to University Health Services.
• November 23, 1973 - Original Policy.