Recently, the US Department of Labor (DOL) performed an audit of Cornell’s pay practices. During that audit, some small errors were discovered in pay that had been issued to certain hourly employees during the period from April, 2013 to April 2015. These errors were the result of time clock rounding errors and/or short-break deductions. If the rounding or breaks impacted overtime, the DOL asked us to compensate the impacted employee. Checks were issued to correct these errors at the end of August, although the DOL has instructed the university to stop payment on any checks that have not been deposited or cashed by September 30. The Payroll Office has received some questions related to the audit and the actions taken, to which the Payroll Office responds:
Q1. What is the significance of the April 2013 date if the practice was in place previous to that as well?
A1. The period of time examined (April 2013 through April 2015) was established by the DOL for the investigation.
Q2. What is the "further action" to be set in motion if the initial checks are not cashed by September 30?
A2. If the checks are not cashed by September 30, the university has been directed by the DOL to cancel them and report the employee names and dollar amounts of the uncashed checks. The DOL will attempt to contact employees who did not cash the checks. After three years, if an employee has not replied to the DOL and claimed the monies owed, the monies will be turned over to the U.S. Department of the Treasury.
Q3. How do we verify that we agree with the figures utilized to formulate the compensation provided?
A3. The DOL requested specific information regarding in and out punches from Kronos. The DOL reviewed the punch information and identified the calculations for which rounding of the in and out punches was not consistent with standard rounding practices. The university agreed to compensate employees for the instances where the punches were not in favor of the employee, as well as employees who had clocked out for any breaks that were less than 20 minutes. The rounding rules have now been revised in the system. We hope this explanation is satisfactory; if you have further questions, please contact Robi Peters at 254-2263 or email@example.com.
Q4. Are all withholdings taken out or do we need to claim this as extra income at tax time?
A4. Tax withholdings have been calculated and deducted accordingly.