Top Story
 The
go-live date for the PeopleSoft financials upgrade is tentatively planned for mid- to
late-November. Because of the
integration between financials and HCM, the timing of payroll processing will
be critical. With the upgrade and
holidays occurring in November, it is imperative that payrolls processed for
all paydates in November be processed timely and submitted in accordance with
the existing policies. Agencies cannot rely
on any extension of that due date. The five
business days prior to the payday deadline should be considered the"drop dead"
date. The deadline for submission for
the Friday, Nov. 14, payday is 3 p.m. on Thursday, Nov. 6. The deadline for submission for the Friday,
Dec. 5, payday is 3 p.m. Wednesday, Nov. 26. Other November paydates will follow the
normal schedule. Please plan now and make
sure that employees know how critical it is to get their time entered early and
payrolls processed timely.
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PAYROLL
The
OMES Form PWC has been updated with a new fax number, (405) 522-2186. Please note
this change and begin sending PWC requests to the new number. The updated form and instructions can be
found on the OMES website.
Faxes
sent to the old number may not be processed in a timely manner which could
cause amounts not to be returned to the state. Agencies are responsible for
collecting any amounts that cannot be retrieved through the PWC process in
accordance with 74 O.S. § 840 - 2.19, Subsection D.
If
you should have questions concerning this change, please contact Lisa Raihl at
(405) 521-3258 or lisa.raihl@omes.ok.gov, Jean Hayes at
(405) 522-6300 or jean.hayes@omes.ok.gov, or Beth Brox
at (405) 522-1099 or beth.brox@omes.ok.gov.
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As
we approach the end of the calendar year, be reminded that the payroll system has
been structured to accommodate the reporting of non-cash, taxable fringe
benefits. Of specific concern to state employees, the following benefits should
be reviewed to determine if W-2 wage adjustments are necessary:
Group Term Life Insurance
Employee Use of State Vehicles
Maintenance, Car and Housing
Allowances
Additional non-cash benefits
Reporting
of these benefits is required by state and federal law, and it is the
responsibility of the individual agency to ensure compliance. If the item is
not run through the payroll system in the current year, the employer can deduct the taxes
associated with the wage item on a following paycheck in the next year, as a miscellaneous
deduction. The state is responsible for
timely depositing the taxes. Any taxes associated with items not run through
the payroll system will need to be sent to OMES in a timely manner so the tax
deposits can be made and the items posted to the employee’s earnings record.
Under
IRS rules, an employer can choose to pay the employee’s share of taxes on group
term life, auto fringe, and other non-cash benefits. If the employer pays these
taxes without deducting them from the individual, those taxes must be included
as wages for federal, state, social security and Medicare wages (boxes 1, 3, 5,
and 16). This increase in the employee’s wages is also subject to employee
social security and Medicare taxes. This again increases the amount of
additional taxes the employer must pay.
Example:
Tom received a non-cash benefit valued at $100.00. The agency decides to pay
the employee’s taxes on all non-cash benefits. The employee’s taxes would be
$7.65 [(100 * 6.2%) + (100 * 1.45%)]. This amount that the employer is paying
for the employee is another benefit to the employee and must be taxed [(7.65 *
6.2%) + (7.65 * 1.45%)] = $0.58. This additional $0.58 is again taxable to the
employee [(0.58 * 6.2%) + (0.58 * 1.45%)] = $0.05. Total taxes to the employee
are $8.28, for total wages of $108.28. An easier way to calculate, is to “gross
up” the benefit. The benefit amount is divided by 92.35% (100% - 6.2% - 1.45%)
and the outcome is the gross wages to report. From this amount, the social
security and Medicare taxes are calculated. 100.00/92.35% = $108.28 (the
taxable wage amount). [(108.28 * 6.2%) + (105.28 * 1.45%)] = $8.28 (taxes).
Under
IRS rules, an employer can also choose to pay the retiree’s share of taxes on
group term life insurance or collect them from the retiree. If the agency pays
these taxes without deducting them from the individual, those taxes must be included
as wages for federal, state, social security, and Medicare wages (boxes 1, 3,
5, and 16). The calculation is the same as the above example. If federal and
state withholdings are required, this must also be taken into consideration for
the calculations. Please refer to the W-2 instructions and Publication 15A,
Employer’s Supplemental Tax Guide for additional information if needed. Also,
please refer to OMES Human Capital Management Division rules to determine
whether these payments are a valid pay plan for a particular agency.
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Employee
overpayments that are collected in the next calendar year are to be repaid at
the gross overpayment amount in accordance with Internal Revenue Service
regulations. If an employee owes the agency, please be certain to let the
employee know if the amount is not paid in full by Dec. 31, 2014, the amount
they owe will increase to the gross amount.
In
accordance with 74 O.S. § 840-2.19, the agency must send a notice
to the employee within 10 days of identifying an overpayment. The employee then has 30 days to respond to
this notification. Employees have
several options for repaying overpaid payroll amounts:
-
reduction
of annual leave (for the gross overpaid),
-
reduction
of current gross salary (for the gross overpaid) in a lump sum or installments
over a term not to exceed the term in which the overpayment(s) occurred,
-
lump-sum
cash repayment,
-
miscellaneous
payroll deduction (for the net overpaid) in a lump sum or installments over a
term not to exceed the term in which the overpayment(s) occurred,
-
any
combination of the above options.
With
the calendar year end so close, the collection of any outstanding overpayments
is especially important and must be conveyed to employees who owe any monies
back to the agency. When an overpayment is paid back in a subsequent year, IRS
rules state that the employee must pay back at the gross amount because they
had use of the funds in the prior year and as such, they are taxable to that
year. Additionally, federal and state wages and taxes cannot be reduced for
prior years when repayments are done after the end of that calendar year.
For
example, John Doe was overpaid in September by $1,000.00 regular wages. This was
discovered in October and the agency calculated what the correct payroll should
have been. The net check difference is $743.50, this is the amount the employee
owes the agency if paying back by personal check or miscellaneous deduction in
the current year. If the employee does not pay this net amount back by Dec. 31,
2014, the employee owes the agency the full $1,000.00 gross overpayment.
The
applicable W-2, Corrected W-2, or W-2C will only reflect a change in the Social
Security and Medicare wages and taxes. Since the employee received and had use
of the funds during the year of overpayment, the amount is still taxable for
federal and state purposes. The W-2 form will not correct Federal or State
taxable wages or income taxes. The employee may be entitled to either a deduction
or credit on their current year Form 1040, please advise the employee to speak
to their tax accountant.
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When
an employee chooses to pay back an overpayment using annual leave, the amount
of annual leave reduced should equal the gross amount of overpayment. In the
past there have been instances where agencies have incorrectly reduced the
annual leave by the net amount of the overpayment.
If
an employee pays back an overpayment using terminal leave, an OSF Form 94P must
be submitted to correct the retirement amounts reported on the check which
included the overpayment. Terminal leave is not included in retirement wage
calculations; therefore, a payroll earnings adjustment is required.
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As
a reminder, in the PeopleSoft HCM system, the W-2 process loads the employee’s
mailing address for IRS Form W-2 reporting.
If there is no value in the mailing address field, then the employee’s
home address will be used on the W-2. If
there is a value in the mailing address field that is not to be used on the
Form W-2, it will need to be updated or inactivated.
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Please verify the correct agency address is being
used on the payroll system. The agency address can be found on the Employee’s
Earnings Statement. If the address is not correct for the agency, this will
need to be corrected before year end processing of tax forms. Please contact
the OMES Service Desk at (405) 521-2444 to have the agency’s address updated in
the payroll system.
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ACCOUNTING
The
Government Services Administration (GSA) has posted revisions to the per diem
rates we use for travel which are effective October
1, 2014. For Oklahoma, the meals and incidental rates (our per diem) did not
change, however, the lodging rates increased for the Non Standard Areas (higher
rate locations).
Please click here to view the lodging
changes that have been made.
The rate change is effective for travel occurring on October 1, 2014, and
thereafter, which is the start of the federal fiscal year (FY) 2015. These
changes may also be viewed or downloaded at the GSA website: www.gsa.gov/perdiem.
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Enrolled HB 2397 (2014 Legislative Regular Session) made
several changes to the State Travel Reimbursement Act. This is primarily
cleanup language to the law based on practices we have already been following
due to other limitations or procedures necessary for more effective application
of the travel act. To read the actual changes in the law you can go to the
Oklahoma State Legislature website and view the bill to see the amended
language.
Section 1. of the bill amends 74 O.S. 2011 § 500.2 to remove outdated language regarding agency direct payment of airfare by removing the use of the employees social security number from the required support documentation and to remove the requirement for a separate affidavit stating the employee used an airline ticket purchased for state travel, as long as the travel claim references the airfare and that it was paid directly by the agency.
Section 2. of the bill amends 74 O.S. 2011 § 500.3 to correct the statutory citation used for
travel claim approval as referenced in the travel act law.
Section 3. of the bill amends 74 O.S. 2011 § 500.9 to remove outdated language for
a “per diem in lieu of subsistence” and clarify the allowance of an additional $10
to the per diem rate for cases where lodging is provided at no cost to the
state (such as when staying with friends or relatives). Per the OMES Statewide Accounting Manual,
Chapter 50.30.05 C., “Per Diem in Lieu of Subsistence” (pg. 209), the proper application of this per diem
allowance is defined as follows:
For
example, an employee may Voucher the authorized "per diem in lieu of
subsistence" allowance where overnight travel was
involved, but expenses for public lodging were not incurred due to the
employee's election to stay with relatives or friends during the travel period.
The allowance, however, would not be authorized for trips in which lodging was
arranged and paid by another source apart from the employee. In other words, an
employee would not be authorized the allowance where lodging was provided
through the cost of registration or "package plan" paid by the state
or provided complimentary by a grantor or sponsoring foundation. That is, if
the employee used furnished lodging during travel, the per diem allowance in
lieu of subsistence shall not be allowed.
Section 500.9, Subsection E.- Amends outdated language to extend the
twenty-four hour limit for travel to include in-state travel when the agency
determines that travel is of duration where overnight travel prior to or after
the trip objective would be necessary
Section 4. of the bill amends 74 O.S. 2011 § 500.15 to allow language where travel claims to be
“approved” instead of being signed. This is to make way for OMES to look at new
electronic ways of making claim approvals by the claimant. However, OMES will continue to consider
signatures to be the approval process until other methods are determined to be
appropriate for claim approvals. This also
corrects the statutory citation used for travel claim approval as referenced in
the travel act law.
These
changes become effective Nov. 1, 2014.
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Please remember that
when creating purchase orders and processing invoices you should be watching to
see that when there are multiple expenses they should be recorded under the
proper object of expenditure account code for each expense. For example, when establishing POs and
processing vouchers for Fleet Vehicle type of expenses the coding could include
any of the following codes, and possibly some vehicle supply type codes:
522110 – Tolls
532140 – Rent of
Equipment
533120 – Maintenance
& Repair of Equipment – Outside Vendor
534290 – Motor Fuels
This is whether the
payment is made by specific PO/voucher or if paid by P-card.
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ENTERPRISE BUSINESS SERVICES - EBS (formerly CORE)
If you are an AP user, there is a new feature
that will provide you with important information about supplier (vendor)
payment holds. Take a look at the Information Icon video to see it in action!
This new feature will alert you to Remit To:
Supplier payment holds on the payment page of the voucher component. As you
well know, there is no such alert in 8.9. You typically don't find out about a
payment hold until after the voucher returns because it failed to
pay. This new icon provides a heads-up a lot sooner in the process.
Don't forget to take a look at all of the 9.2
Financials Upgrade Delta Training Videos including: Budget Detail Search and 9.2 Navigation.
The EBS Upgrade Team encourages all users to
review the videos -- regardless of the content -- in order to get a
look at the new 9.2 environment.
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Several new resources are posted and available
to give you an advance look at 9.2. Accounts Receivable, Asset Management, and
Grants and Contracts all have new items available. In addition, some of the
existing Quick Tips have also been updated and posted.
EBS financials manuals and other resources are,
and always have been, available on the EBS Financials Page for end-users to download and use at their
convenience.
Just look for manuals and resources with a 2014
date.
How to Use EBS Manuals
EBS manuals do not train individual agency
business processes. They are PeopleSoft manuals to teach end-users how to use
the software. How your agency uses it and what your agency requires as data and
input for the software is a business process and can vary greatly from agency
to agency.
Best Practice
- All manuals are Microsoft Word documents.
- Download the manual you want.
- Add your agency business processes in the appropriate
spots within the manual.
And there you have it -- one resource that includes important technical
information about the software AND your own agency rules!
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