Managing retroactivity in states where negative pay adjustments require consent

[Former Member]

A number of US states are now requiring that employees be notified and give written consent in advance of any negative adjustment to pay.  South Carolina, Texas, Michigan, New Hamphsire and Illinois are among the states with these regulations. 

Highly sophisticated retroactivity is one of the cornerstones of SAP Payroll.  These new regulations present challenges for compliance as we find ourselves now introducing manual processes to identify negative retroactivity occurring during payroll runs and temporarialy offset it while the employee notification and consent process is completed.  This generally means manual monitoring over several pay periods (we are paying weekly / bi-weekly) to gain the consent and then manually back out the offset so the negative adjustment can be finally applied.

Seeking feedback / advice on how other companies are handling this compliance situation and wondering if SAP will provide a more automated solution to enable the process with US payroll clients.

[former_member235056]

Hi Shayne,

SAP delivered a functionality named Overpayments Recovery.

This functionality requires minimum wages to be set-up and also a switch in table T77S0 to activated with function USCLM in US payroll schema.

When this functionality is activated it creates /58* series wage types in payroll if there are any overpayments or claims and then allows you to create IT0909.

IT0909 is then used to allow overpayments to be managed well depending upon business needs as to forgive, partially forgive or completely forgive claim amount.

It alos has provision in form of checkbox to get consent from employee before managing their claims or overpayment amount in system.

Accordingly it fulfils legislative needs for some states where employee consent is needed to manage overpayments and also to make sure overpayments do not cross minimum wages requirements of respective state so employee can survive with enough payment.

Thanks,

Ameet

[SteveBogner]

Hi Shayne - have you looked at SAP's 'overpayments' functionality? Take a look in the IMG for US Payroll and you should see it. That functionality intends to address this requirement by implementing that consent process as well as other functions for recovery. I'm not a fan of it (I'm sure it has improved the last few years), but maybe after some prototyping you might find it useful.