Payroll Processes Overview

The standards below are centered around payroll cycles, the timing of payments at IU, how to access paycheck information, request and process paycheck reissues, and the procedures for paycard pickups.

The standard regarding payroll cycles below outlines the process for recording, reviewing, and approving time worked by non-exempt employees, as well as the timing of on-cycle and off-cycle payroll for both biweekly and monthly pay schedules at Indiana University. It highlights the requirement for employees, payroll processors, supervisors, and fiscal officers related to the payroll cycle at IU. Following and understanding this standard helps ensure accuracy in wage calculation, compliance with labor and tax laws, and timely payment to employees-supporting trust, transparency, and financial integrity in IU’s payroll operations.

The second standard below is focused Indiana University’s payroll payment methods. The preferred method of payment is direct deposit to a U.S. financial institution, which is secure, efficient, and reliable. In limited cases outlined below, employees may receive paper checks or paycards. Review the standard for detailed information about employee responsibilities related to payment methods at IU.

UCO-PAY-3.00: Payroll Cycles and Timing of Payments

Prerequisites

Prior to reading the standard on Payroll Cycles and Timing of Payments, it is beneficial to review the below item to gain foundational information:

1. FIN-PAY-030: Timing of Payments and Off-Cycle Payroll

Preface

This standard will explain the different payroll cycles and when employees can expect to receive payment.

Introduction

Federal and state authorities regulate the timing of payroll payments. To meet its obligations, the university must develop payroll calendars to schedule the timely payment of its employees. Additionally, it is necessary to provide mechanisms to pay employees outside the regular payroll schedule (on-cycle payroll), when, due to errors or omissions, employees are not paid the full amount due them. This standard establishes University Payroll responsibility for the development of payroll schedules, as well as sets conditions when payroll payments submitted for off-cycle payrolls will be paid, to comply with applicable regulations and to strengthen internal controls.

Importance and Impact of Payroll Cycles and Timing of Payments

Indiana University pays non-exempt employees on a biweekly basis, two weeks in arrears, and pays exempt employees monthly, on the last business day of the month in which the work was performed (except for December, which is paid on the first business day of January). The schedule for payment is established by University Payroll annually to distribute all pay on the regularly-scheduled paydays through on-cycle payroll processes. University student academic appointees follow a separate payment schedule, the timing of which is determined by University Payroll with input from Academic Affairs.

It is the responsibility of the fiscal officer to be aware of the university payroll calendar to ensure appropriate controls are in place for accurate and timely payments as well as for budget management. The university payroll calendar is also important for employees to determine when they will receive pay and to determine the accuracy of their pay advice. It is the employee’s responsibility to communicate with their supervisor about any errors they identify on their pay advice. It is the supervisor’s responsibility to report errors to their unit’s payroll processor and fiscal officer.

For detailed information on current year university payroll calendar, please see the UCO Pay Dates webpage.

Payroll Cycles and Timing of Payments Discussed in Detail

University Payroll has the authority and responsibility to create, implement, monitor, modify, and enforce operating procedures and internal control processes consistent with this standard to ensure accurate and timely payment of Indiana University’s employees in compliance with the university’s legal obligations, including development of the annual university payroll calendar.

It’s the responsibility of the supervisor and fiscal officer to verify that the individual is properly established as an employee before services are performed to ensure accurate and timely payment. It is also the responsibility of the employee to ensure all required onboarding documentation has been provided on a timely basis.

Fiscal officers and payroll processors are required to be aware of and adhere to payroll period closing dates, which generally occur several business days in advance of the pay date.

In cases where an employee was not properly paid for any reason, such as omission from the on-cycle payroll, the occurrence of processing errors, or direction of the payment to the wrong employee, the employee’s department must prepare an off-cycle payroll payment (in the form of an ACH payment, paycard deposit, or a paper check) to the employee on the next available off-cycle payroll.

Off-cycle payroll should be used for the following reasons:

• Corrections/Adjustments of previous pay periods
• Tax refunds
• Deduction refunds
• Grossed-up payments
• Settlement payments
• Payout after involuntary termination of employment
• Stop payments and/or reissue
• Direct deposit returns initiated by the employee’s financial institutions
• Other circumstances determined appropriate by University Payroll, such as special payments needed for regulatory or tax compliance, or payments needed due to errors or omissions

Other payments, such as discretionary bonuses and awards, should continue to be processed during the on-cycle payrolls.

Supervisors and fiscal officers are responsible to ensure employees are promptly terminated on the conclusion of their employment to avoid overpayment errors.

Requirements

1. It’s the responsibility of the supervisor and fiscal officer to verify that the individual is properly established as an employee before services are performed to ensure accurate and timely payment.
2. It is the responsibility of the fiscal officer to be aware of the university payroll calendar to ensure appropriate controls are in place for accurate and timely payments as well as for budget management.
3. Fiscal officers and payroll processors are required to be aware of and adhere to payroll period closing dates, which generally occur several business days in advance of the pay date.
4. Employees should regularly review their pay advices for accuracy with regards to earnings, deductions, and taxes. Employees can review the View Paychecks Online guide for detailed explanations of fields on their paycheck. Employees should immediately notify their supervisor of any issues with their pay advices.
5. Off-cycle payroll should only be used for the reasons noted in this standard.
6. Supervisors and fiscal officers are responsible to ensure employees are promptly terminated on the conclusion of their employment to avoid overpayment errors.

UCO-PAY-3.01: Payroll Payment Methods

Prerequisites

Prior to reading the standard on Payroll Payment Methods, it is beneficial to review the below items to gain foundational information:

1. UCO-PAY-3.00: Payroll Cycles and Timing of Payments
2. FIN-ACC 580: Risks of Potential Identity Theft in the Use of Stored-Value and Payroll Deduct

Preface

This standard provides information and guidance on payroll payment methods and corresponding pay advices utilized by University Payroll to pay employees. The university’s preferred method of payment is direct deposit, however, other payroll payment methods include paycards and paper checks.

Introduction

University Payroll manages the processes for issuing and distributing payroll via direct deposit, paycards, and paper paychecks, and for providing employees with pay advices. University Payroll has the authority and responsibility to create, implement, monitor, modify, and enforce operating procedures and internal control processes consistent with this standard to ensure accurate and timely payment of Indiana University’s employees in compliance with the university’s legal obligations.

Importance and Impact of Payment Methods

Indiana Code 22-2-2-8, part of the Indiana Code Title 22, Labor and Safety, requires employers to provide employees with a statement each pay period detailing hours worked, wages paid, and deductions, and to furnish a statement of this information upon demand. To comply with this statute, University Payroll will provide each employee with electronic pay advices detailing required information. It is the responsibility of each employee to review their pay advices promptly to identify and report all errors to their respective departmental payroll office. This requirement also applies to payroll payments made to retirees and terminated employees.

Indiana University’s preferred payment method is via direct deposit electronic funds transfer to the US financial institution(s) designated by each employee. Payroll direct deposit is a convenient, secure, fast, and cost-effective method for delivering wage and salary payments. Direct deposit ensures employees receive their pay even if they are away from work due to travel, illness, or leave.

Payment Methods Discussed in Detail

It is the preferred method of Indiana University to pay its employees via direct deposit to the U.S. financial institution(s) designated by each employee. There are limited circumstances in which employees may be paid via paper checks or paycards. These include:

1. Initial Enrollment and Final Payroll Payments. Initial and/or final payroll payments may be issued as a paper checks or deposited on paycards due to the timing of an employee’s hire or separation, enrollment in direct deposit, and the payroll-processing schedule.
2. Foreign Nationals without a Valid Social Security Number (SSN). Foreign nationals who experience a waiting period before being issued a SSN may encounter difficulty opening an account with a U.S. financial institution or obtaining a debit card. Such individuals will be paid temporarily by paper checks or paycards but are expected to enroll in the direct deposit program immediately upon issuance of their SSN.
3. Other Exceptions. In special circumstances, University Payroll may consider other exceptions for documented and compelling reasons. Requests for exceptions should be processed through the departmental payroll office and communicated to University Payroll.

Additional Procedures for Paper Checks and Paycards

Paper checks and paycards must be picked up in person by the employee at the designated Bloomington or Indianapolis campus locations; or may be mailed directly to the employee’s official home address of record. Employees are not permitted to designate a representative to pick up their paycheck or paycard. In limited, documented circumstances an approved departmental university representative may be permitted to pick up the paycheck or paycard on the employee’s behalf.

New employees that have not signed up for direct deposit will receive a maximum of two paper checks. On the third payment, employees will be assigned a paycard. Once the employee enrolls in direct deposit, IU will no longer load payroll payments on to the paycard.

If a paycheck is lost, stolen, or mutilated, it may be replaced if authorized by the applicable campus payroll office. If an employee, fiscal officer, or other departmental representative believes wages have been misdirected through suspected Direct Deposit fraud, please contact UCO, University Information Security Office (UISO). If fraud is suspected, please refer to the FIN-ACC-30: Fiscal Misconduct and FIN-ACC-35: Fraud.

Requirements

1. Indiana University’s preferred payment method is via direct deposit electronic funds transfer to the US financial institution(s) designated by each employee. Departments should encourage all employees to sign up for Direct Deposit.
2. It is the responsibility of each employee to review their pay advices promptly to identify and report all errors to their respective departmental payroll office.
3. Paper checks and paycards are required to be picked up by the employee in person at the designated Bloomington or Indianapolis campus locations; or may be mailed directly to the employee’s official home address of record.
4. Any instance of suspected fraud must be reported to University Payroll, UISO, and in accordance with FIN-ACC-30: Fiscal Misconduct and FIN-ACC-35: Fraud.