Ohhhh boy, the HR doo-doo is going to hit the fan

[Marguerite]

Maybe this is the time and the perfect excuse to recommend a careful cross-check of the personnel files and payrolls, just to make sure this isn't happening somewhere else. Finding any more of these otherwise undetected could win back some brownie points.

Marg

 

[ML]

Marg that's a brilliant idea. I love it.

 

[hearts and roses]

I agree, some checks and balance are in order.

When the payroll was changed from in-house(me) to our accountants, my position and responsibilities became a bit muddled. I believe that is wherethe trouble began. Apparently I am still responsible for it all but the bookkeeper just processes the payroll and pays bills.

Oh well, it is what it is and it will all work out. I was freaking out but talking it out here and thinking it over, my feeling is that we're human and we all make mistakes. My boss will make his own judgments and we'll see how it goes.

Thanks again and I will keep you posted!

 

[DDD]

I'm not experienced with large companies but I have fifty years of experience in business. Maybe I am naive but I don't understand why payroll forms have to be altered to "what should have been". The fact is that the employee did receive the amount recorded. Your corporation paid what was recorded. The fact that she was overpaid doesn't negate the accuracy of what actually was paid and is reflected in the filings. Future downward adjustment
will be reflected in the future. To me it sounds like six of one and a half dozen of another. DDD

 

[Josie]

She didn't earn the money and has to pay it back, so it isn't taxable earnings to her. Her W2 needs to be amended so she doesn't have to pay tax on it. That means all of the year end payroll reports have to be amended.

To the company, it wasn't an expense. It should be recorded as a receivable. This part may not matter so much if the amount isn't large compared to the total financial picture. I worked in nonprofits so tax liability wasn't an issue. The IRS would definitely want its cut of the additional net income (since expenses were reduced). I'm not sure about that part.

We probably would have amended last year's payroll report and W2 but not the first 2 quarterly reports for this year. The adjustment could be included in the 3rd quarter report, like DDD said. It seems like too much would have been paid in so it isn't like you underpaid and need to pay in more.