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ACH return items occur when direct deposit fails or funds must be retrieved due to payment error.  

Process Overview 

• Daily check for ACH returns: UM System Central Payroll reviews Commerce Bank information daily. Any returns reflect transactions from the previous day. 
  • The report includes employee ID, amount returned, effective date, and reason for the return. 
• Verify payroll data: Central Payroll checks the employee paycheck information in PeopleSoft. 
• Notify campus payroll: Central Payroll emails the relevant campus with the return details and reason.  
  • Notifications are sent the same day the information is received and include account details. 
• Process corrective action: Payroll processes a CRR to place funds in the correct accounts.  

Payroll Codes 

• Columbia payroll: C4705 495000 
• Kansas City payroll: K8635 495000 
• Rolla payroll: R2048 706500 
• St. Louis payroll: S1324 495000 
• Hospital payroll: H1493 430000 
• UM System payroll: A0227 742000 
• Benefits: U0134 833600 

Types of Return 

• Bank-initiated return: When the bank cannot post the deposit, such as a closed account or invalid routing number.  
  • Campus payroll should issue an AP check to the employee and Form W-2 totals are unchanged. 
• Payroll requested return: Occur when payroll identifies an error, such as overpayment.  
  • Campus payroll should email Central Payroll as soon as identified, including name, EMPLID, pay date and reason for return.  
  • Central Payroll will attempt recovery and inform campus payroll of the outcome, updating Form W-2 totals when necessary, via reversal. 
  • When appropriate, Central Payroll will process a CRR, placing the funds in account A0213 495000. 

Overpayment means an employee was paid more than entitled to. Overpayments must be handled with sufficient notice and documentation.  

• Departments: Notify the affected employee in writing providing the Acknowledgement of Overpayment form. Form provided by Shared Services. Retain copies of all correspondence and submit documentation to University Shared Services. 
  • Active employees may be notified via email. 
  • Former employees must be notified by certified letter on department letterhead. 
• Repayment: Active employees may opt for an after-tax payroll deduction and electronic check (ACH) is available to active and former employees.  
  • University Shared Services adjusts wages and returns funds to the appropriate account upon receipt.  
• No response: Departments must issue a second written notice after two weeks. Advance written notice is required before withholding pay. 
  • Employees may dispute the overpayment and request a meeting.  

Refunds of state income tax apply in cases where tax is incorrectly withheld. The process of refunding depends on the amount and requires amended filings. 

• Processing fees: A $25 processing fee per form applies for each amended tax return filed. Each return is treated separately. For example, corrections in both Missouri in Illinois would be a $100 fee (Form W-2c and Form 941X for each state) 
  • For refunds more than $50 per tax year: Fees are deducted once the state refund or credit is received and the remaining refund is sent to the employee. 
  • For refunds less than $50 per tax year: Employees or former employees must prepay via mailed check or money order. The full refund or credit is sent directly to the employee or former employee once received. 
• Amending tax returns: UM System Central Payroll files amended tax returns with the State withholding agency (e.g., Form MO-941X for Missouri). 
  • Annual informational returns (e.g., W-2c or 1099-R) are corrected as needed. 
  • Copies of the informational return are provided to the state (attached to amended return) and to the employee/former employee.  
• Refunds and credits: The state withholding agency issues a refund or credit for any overpayment. 

Exempt employees are paid a salary but pay must be reduced when unpaid time off applies.  

• Reporting codes: Special time reporting codes are used to record this time. 
  • RRW: Absent without pay (monthly) 
  • RRT: Absent without pay (monthly temporary) 
  • LAM: FMLA absent without pay (monthly) 
• Calculation: Calculate the pay adjustment by multiplying the unpaid hours reported by the employee’s hourly rate.  
  • Full-time: Find hourly rate by dividing annual salary by 2,080 hours. 
  • Part-time: Adjust the hourly rate calculation to match the FTE. For example, 0.8 FTE has an hourly rate of 1,664 hours (2,080 x 0.8). 
• Notification: Employees who had a reporting code reducing wages the week prior receive notification via email on Mondays. 
  • Supervisors or timekeepers should inform employees in advance to avoid surprises.  
• Processing: All exempt time reporting codes are auto-approved.  
  • Pay reduction occurs on that month or the next month’s paycheck depending on whether codes are entered before or after the monthly payroll confirmation date.  
• Disputes: Employees should contact the HR Service Center, who will refer disputes to campus payroll and University Shared Services to review with the department fiscal officers. 
  • Unresolved cases after fiscal review escalate to the campus CHRO or designee.