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July 7, 1999
April 18, 2016
This policy describes the University’s regular payroll process and the processes for handling a number of non-standard payroll-related situations.
The Payroll Department, under the direction of the Assistant Vice President of Yale Shared Services, issues salary and wage payments to employees, both as part of the regular payroll cycle as well as outside of the regular payroll cycle when necessary. Special care is taken to ensure that exceptions to the regular payroll amounts or cycle are properly justified, calculated, and authorized.
Reason for the Policy
Salaries, wages, payroll taxes and associated benefits constitute a significant portion of the University’s overall expenditures and are subject to regulations imposed by the federal government, various state governments, and other agencies. The University has established payroll systems and processes to promote compliance with all applicable regulations and with its own fiscal management responsibilities and objectives.
Form I-9: Employment Eligibility Verification
A U.S. Citizenship and Immigration Services (USCIS) form that documents evidence of an individual’s legal eligibility to work in the United States.
Form W-4: Employee’s Withholding Allowance Certificate (Federal)
A federal form that is completed by an employee to establish marital status, number of allowances, or exempt status used in the calculation of federal withholding taxes only (See Federal W-4 Employee Withholding Election Form in the Workday Pay worklet).
Employee’s Withholding or Exemption Certificate (State by State)
A state form that is completed by an employee in order to establish the filing status or exempt status used in the calculation of state withholding taxes only (See State W-4 Employee Withholding Election Form in the Workday Pay worklet).
The Payroll Department processes regular paychecks to an employee only if the appropriate salary or wage authorization exists as evidenced by having:
- A complete employee record in the Human Resources database, which includes, at a minimum, the employee’s position, salary or wage rate, and I-9 status. The following data are not required to issue a paycheck but if present, they will be reflected in the payroll: withholding elections, labor schedule (charging instructions for salary or wages), and Direct Deposit Request. (See Policy 3503 Administrative Tasks in Support of Hiring through Termination for a more detailed description of the roles and responsibilities for completing the employee record) (Needs link); and
- A timecard in one of Yale’s timekeeping system, if required. All non-hourly employees paid on a monthly basis are not required to submit a time card to be paid their base salary. Clerical & Technical (C&T), Security, Service & Maintenance (S&M), and Yale Police employees are paid based on the timecard in the relevant timekeeping systems. (See Policy 3502 Timekeeping for further details.)
Employment and payroll information is confidential. All documents and electronic records related to payroll must be handled and stored in a manner consistent with their confidentiality by all who have responsibility for any aspect of the payroll function. Such information will not be released except to University employees who need the information to perform their job responsibilities. Information can be released to outside parties only with a release request signed by the respective employee, or for duly authorized audits, subpoenas, court orders, etc. The Payroll Department and Human Resources administer the release of employee information.
The Payroll Department is responsible for reviewing pay amounts each payroll cycle using broad parameters for reasonableness.
Lead administrations are responsible for ensuring that a Payroll Preview Review is performed of the payroll to ensure that it is accurate. See the Financial Review Checklist for further information.
The Payroll Department issues paychecks according to a payroll schedule approved by the Assistant Vice President of Yale Shared Services (See Pay Schedules).
The following payments may be issued between regularly scheduled paydays.
Salary and Wage Advances
Salary and wage payments are not normally available in advance of scheduled paydays. In the case of an unusual and unforeseeable individual short-term financial need, a salary or wage advance may be considered. However, reasons such as payment of income taxes, purchases of goods and services, early receipt of final paycheck, camp or tuition fees, international/domestic travel and vacations are not considered unusual or unforeseeable. Advances may be made to new international employees who are unable to take more than a minimum amount of currency out of their country. Advances may be made for faculty and Managerial and Professional and Clerical and Technical employees only and are limited to one per 12-month period.
Requests for salary and wage advances must be submitted to Employee Services (email@example.com on Form 3501 FR.09 - Vacation or Salary/Advance Request Form). In addition, documentation of the emergency, in the form of an estimate or receipt, may be required.
All request for Salary Advances payments must be approved by the Controller’s Office
Salary and wage advances may be requested in any amount up to the equivalent of the regularly scheduled net pay for one payroll period and may in no case exceed $10,000. Advances must be repaid in the payroll period immediately following the advance date.
Advance payments are issued by check and held for pickup at 221 Whitney Avenue, unless the employee requests distribution via U.S. Mail.
A vacation advance is a salary advance that is allowed because the employee will be on vacation on payday. Vacation advances are only issued to monthly employees and regular Clerical and Technical employees who do not have direct deposit and will be on vacation on the day that paychecks are issued. Vacation advances are limited to the number of regular hours normally worked in one payroll period. Requests for vacation advances must be submitted to Employee Services (firstname.lastname@example.org on Form 3501 FR.09 - Vacation or Salary/Advance Request Form).
Lead Administrators and operations managers and employees are responsible for identifying underpayments. See the Financial Review Checklist for further information.
In cases where an underpayment occurs, the department must submit Form 3501 FR.07 Payroll Payment Adjustment Form to email@example.com to request payment of the underpayment to the employee. See Procedure 3501 PR.04 Overpayments and Underpayments.
The processing of payroll payments is limited to regularly scheduled pay dates, and underpayments will be added to the active employee’s next regularly scheduled paycheck.
Following are the only exceptions to receiving underpayments in the next paycheck:
- To comply with Connecticut law, the University must pay hourly employees all pay owed them within eight days after the end of the pay period.
- Since there is no “next payment” for staff no longer employed by the University, underpayments for terminated staff will be processed and picked up by the employee at the Employee Service Center or sent via U.S. Mail to the person’s address on Form 3501 FR.07 Payroll Payment Adjustment Form.
- Errors in payroll processing that result in an underpayment of a monthly employee’s base salary. All requests for monthly off-cycle payments must be approved by the Controller’s Office.
When employees are promoted or reclassified, retroactive salary adjustments may be appropriate, for example, where the effective date of a wage or salary increase precedes the beginning of the current pay period or a retroactive job reclassification results from an audit.
Human Resources must authorize and enter any retroactive payment for staff members into the Human Resource/Payroll application. Payments to Faculty, Postdoctoral Associates and Postdoctoral Fellows are processed through the Provost’s Office or the Medical School Business Support Center. Retroactive salary adjustments will be included in the employee’s next regularly scheduled paycheck.
Lead Administrators and operations managers and employees are responsible for identifying overpayments. See the Financial Review Checklist for further information.
If an overpayment is discovered, the department must immediately inform Payroll by submitting the proper form to employee.services @yale.edu. (See Procedure 3501 PR.04 Overpayments and Underpayments). Payroll will calculate the amount of the overpayment and notify the lead administrator supervisor and employee that corrective action will be taken to reimburse the University for the funds. Payroll will then follow up on the overpayment until it is recovered or written off. In the case of overpayment received by an active employee, the University will withhold the overpayment from the employee’s next regularly scheduled paycheck(s).
If the employee is no longer employed by the University, he or she must make an immediate reimbursement to the University, regardless of how the overpayment occurred. Upon reimbursement of the overpayment to the University, the Payroll Department will correct the employee’s record.
When an employee separates from the University, either voluntarily or involuntarily, specific steps need to be taken to ensure the proper termination of payroll. The separation must be timely entered into the employee’s record in Workday.
An employee who either resigns or is involuntarily separated may be entitled to payment for unused accrued vacation time, PTO, or sick time that must be calculated in accordance with the policies set forth in the Personnel Policies and Practices Manual and contracts. (See 3501 PR.11 C&T and M&P Employee Layoffs for a discussion of terminal vacation pay.) The requesting department must document the separating employee’s accrued vacation or PTO.
Payment for unused accrued vacation/PTO and sick pay will normally be included as part of the employee’s last regularly scheduled paycheck.
The Payroll Department processes mandatory deductions from an employee’s paycheck in compliance with government regulations, and processes voluntary deductions within its scope in accordance with documented employee authorizations. The Benefits and Parking Offices process voluntary deductions within their scope in accordance with documented employee authorizations. Those departments respectively ensure the timely disbursement of amounts withheld from employees’ paychecks to governmental or other agencies in accordance with statutory regulations or executed agreements. In addition, employees can request that their gifts to Yale be deducted from their paychecks (Form 3501 FR.11 Gift to Yale - Payroll Deduction Request).
The Payroll Department withholds from the paycheck of each employee all applicable statutory tax deductions. These include, but are not limited to, federal and state income tax withholding, and FICA taxes (Social Security and Med B). It is also responsible for tax payments and deposits arising from salary and wage payments and for associated tax reporting.
The Payroll Department will also withhold from an employee’s paycheck any outstanding expense advance in accordance with Section 3305.8 of Policy 3305 Long-Term Activity Expense Advances.
The University is required by law to execute, often without the employee’s consent, all legal wage assignments such as tax levies, garnishments, bills of child support or other court-ordered wage attachments.
Court-ordered wage attachments and federal and state levies will be deducted, based on the information provided by the court or agency, in the payroll cycle immediately following receipt of the attachment or levy, or as otherwise specified in the attachment.
Although the regulatory agency is responsible for notifying the individual of the wage attachment or levy, the Payroll office notifies an individual about a Federal Levy via certified mail.
Lost or stolen checks or errors in processing can lead to requests for Stop Payment of issued checks and cancellation of returned checks. The Payroll Department handles Stop Payments and Check Cancellations. Stop Payment requests must be communicated to the Payroll Department as soon as an employee becomes aware that a paycheck has not been received or has been lost or stolen. The department must submit a Stop Payment & Re-Issue Request form (Form 3501 FR.08 Stop Payment & Re-Issue Request) including the reason for the Stop Payment, the employee’s signature, and the date of the check. Verbal Stop Payment requests will not be honored.
Cancellation of a check will be effective only after the Payroll Department receives a written request stating the reason for the cancellation, accompanied by the check that is to be cancelled. The Payroll Department will issue replacement checks in a timely manner, if and when deemed appropriate. However, in no instance will a check be reissued until either:
(a) the Payroll Department confirms with the bank that a Stop Payment order is in effect, or
(b) the check to be cancelled is received by the Payroll Department. A payroll check that has been paid cannot be stopped, cancelled or reissued.
Felonious authorizations of paychecks should be immediately reported to a central University department such as Human Resources, General counsel, Controller, University Auditing or the Yale Hotline (1-877-360-YALE).
The Payroll Department prepares and mails paychecks to the responsible department or other paycheck destination indicated on each individual employee’s payroll record in time for distribution on regularly scheduled pay dates. If a paycheck cannot be delivered to the payee in a timely manner, or if the payee is not employed by the indicated responsible department, the department must immediately notify and return any paycheck to the Payroll Department. Payroll immediately sends unclaimed paychecks to the employee’s home address.
In accordance with the State of Connecticut Abandoned and Unclaimed Property (escheat) Law, the University remits to the State of Connecticut paycheck amounts for any paychecks that are not cashed by the payee for a period of one (1) year.
General Accounting is responsible for reporting and remitting check amounts outstanding (i.e., not cashed) for one (1) year on an annual basis. After remittance by the University to the State of Connecticut, payees who wish to recover the amounts due to them must make claims to the State in accordance with escheat procedures.
It is the responsibility of the employee to review all payments and deductions (e.g., medical, dental, etc.) on their pay document for accuracy each pay period. Employees should maintain these pay documents for their permanent record. The Employee Service Center (link) should be notified immediately if discrepancies are identified. Employees should submit W-4 forms if the withholding amounts are to be updated. Changes of address should be submitted by the employee in the Personal Information Worklet of Workday, available via the University Portal.
Payroll Costing is the process that assigns charging instructions to earnings, deductions, expenses, and other payroll-related journal entries. Payroll Obligation is the process that obligates salary across the fiscal period for filled positions. Payroll Costing and Payroll Obligations must be performed in accordance with Procedure 3501 PR.01 Payroll Costing and Procedure 3501 PR.03 Payroll Obligations.