Innovations

Payroll—It’s Really Not Magic

by Anita Bingaman

Twice a month without fail, as if by magic, all 37,000 employees of the UW are compensated for their work. As the second largest employer in the State, the UW has been called a city within a city. This varied workforce is comprised of police officers, electricians, nurses, student assistants, researchers, faculty, support staff, and truck drivers with each group having distinct payroll requirements. The different requirements are rates of pay, deductions, exemptions and withholding levels. With all of the complexities of this process, it seems even more magical that employees can count on being paid on time. In all these years at UW, payroll has never been late.

However automatic and magical it may seem, in reality it is the hard work of the 20 knowledgeable and dedicated people in Payroll who make this happen. There are many wizards behind the screen. Only, these wizards are not pulling levers and flashing lights, like the famous Wizard of Oz at the end of the Yellow Brick Road. These payroll wizards are experts in Federal Tax rules and regulations, Social Security requirements, the Revised Code of Washington, University rules and regulations, HEPPS and OPUS. They work with Payroll Coordinators, the Benefits Office, State and Federal Agencies, and Human Resources to insure that the University is in compliance with all the various regulating agencies.

Who We Are and What We Do

The work of the Payroll Office, headed by Cindy Gregovich, has two collaborative fronts. Ginny Montgomery leads the Production and Client Service Teams, which, as the titles suggest, either produce checks or guide and train departmental payroll coordinators in the production of checks. These teams also oversee OPUS (Online Payroll Update System) and HEPPS (Higher Education Personnel and Payroll System). Heather Norberg Stewart leads the Tax and Accounting Team that insures that all deductions and adjustments to checks are correct and that all transactions are compiled, analyzed and reported to the proper agencies. To be sure that people are properly paid, it is imperative that their deductions are accurate, so all Payroll teams work closely to insure that the net amount the employee receives is correct. See web site below for a complete list of areas of responsibilities and contact persons: http://www.washington.edu/admin/payroll/staff.html

Deductions and Reductions

When you look at the Employee Self Serve check advice, you will see two types of adjustments to an employee’s check. The first types are called Reductions and are pre-tax. The second series of adjustments are called Deductions, which fall into two categories. The first category contains all of the Federal Taxes withheld and the second category is Insurance and Other.

Deductions and Reductions are given GTN numbers (Gross to Net adjustment) for tracking purposes. This tracking falls under the responsibility of the Tax and Accounting Team, which oversees the correct set-up of the adjustment. Then, after every payday, a report for each adjustment is generated and distributed to a member of the T & A team. These reports are analyzed and used to disburse funds to the appropriate agency or organization.

Reductions adjust the amount of earnings that are subject to Federal Withholding, Social Security, and Medicare. These include Retirement, Health Insurance, and Parking. With the exception of the Seattle campus, the Payroll office is responsible for processing parking reductions. The retirement and health portions of this category are managed by the Benefits Office.

The first category of the Deduction section of the check advice is governed by the Social Security Administration (SSA) and the IRS. In the case of Social Security, wages are reported and the dollar amount withheld transmitted. The University’s contribution must also be transmitted to SSA. In the case of Federal taxes withheld they are transmitted to the Department of the Treasury.

The Insurance and Other category of the Deduction section includes Life Insurance and Long Term Disability Insurance, which are managed by the Benefits Office. Payroll manages Medical Aid/Workers Compensation, which is a State industrial insurance program and the 37 deductions that fall under “Other.” These include seven different unions and 30 other deductions, such as Combined Fund Drive, US Savings Bonds, and membership dues for affiliated University organizations.

In addition to mandatory and voluntary deductions, there are deductions for Child Support and repayment of unpaid obligations. These are also assigned GTN numbers and must be set up and processed as any other deduction.

The Money Side

Another vital behind-the-scenes component of Payroll is insuring that there is money in the bank to cover all of those checks that are processed each pay period. The dollars are large: $40 million in direct deposits and $2 million in paychecks each pay period. The outstanding checks are at least $1 million a month and must be tracked and reported to the Washington State Department of Revenue-unclaimed property department. Payroll also works with Wells Fargo and the Seattle Police when forged checks are discovered. An added component that makes reconciling the payroll bank account more complicated than a home account is that two systems need to balance, HEPPS and FAS. Payroll is initially recorded in HEPPS, which downloads into FAS and the two systems must tie to each other.

Along with reconciling the bank account, all State and Federal Taxes must be compiled, reconciled and transmitted to the appropriate agency. There are 16 to 24 States where employees work and pay State Income taxes, which means that Payroll must deduct, record and transmit the taxes for these employees. The largest transmission is the approximately $15-$16 million wired each pay period for Social Security, Medicare and IRS.

Payroll is also responsible for producing checks for people who leave the University and in special cases, where time worked was not entered into the system appropriately. In other cases where an individual is overpaid, it then becomes the responsibility of Payroll to process the repayment.

Outreach and Miscellaneous Payroll Functions

A major responsibility for the Payroll office is to train the Departmental Payroll Coordinators in the operation of OPUS (Online Payroll Updating System). The Client Services team conducts initial training, but is always available on a daily basis to answer questions and walk the Coordinators through any problem. The CS Team also provides training in all other aspects of Payroll.

In addition to all of the above, the Payroll office does adjustments to budgets. The most familiar is the Retroactive Salary Transfer, where salaries have been paid on an incorrect budget and then are transferred to a correct budget using the FASTRAN application. Another adjustment is the final step in the Shared Leave process. This process allows employees to receive compensation while on medical leave using donations of Vacation, Sick Leave, or Personal Holiday hours from another State employee. Using FASTRAN the payment of the hours to the Recipient is transferred to the budget of the Donor. Budgets are also adjusted for repayment of Sick Leave using the Journal Voucher process.

As you can see Payroll not only produces 37,000 checks, but also insures that all factors related to making adjustments to those checks are in compliance with rules and regulations. For the employee, this means that in addition to knowing that his or her check will be in the bank or in hand when promised, they also have the confidence in knowing that all the related transactions are accurately carried out.

So, the next time you look at your check on Employee Self Serve or look at your remittance advice, don’t think of it as a magical happening, but as a teaspoon of honey produced by a squadron of very dedicated bees.