Policy AM-205-4 Employee Indebtedness

Once CPD is notified of the amount owed by the employee from the employee’s Agency, the employee will receive written notification of the debt. The written notice will inform the employee, at minimum, the reason for indebtedness; the amount of the debt; and the time period (which varies upon the course of action taken by the employee) in which the employee must pay their debts, contest debts, or have pay garnished voluntarily or involuntarily through payroll deduction. The written notice will also indicate that the employee may dispute the debt, in writing, within five (5) business days of receipt.

An employee who disputes an indebtedness must include a full explanation in their response and backup documentation to substantiate their claim. CPD will notify the employee, in writing, of the final determination within five (5) business days. The employee may appeal the determination to the Central Payroll Manager within five (5) business days, and the Manager must respond within five (5) business days of receipt of response by CPD. If the debt remains unpaid after thirty (30) business days of CPD’s final determination and no arrangement for repayment have been made, the collection process will begin to collect the debt. Further, the employee may be subject to discipline, up to and including termination.

If, after ten (10) business days from when the Agency notified the employee of an overpayment, CPD has not received a letter of protest, a signed installment election form, the uncashed erroneous paycheck, or an employee’s personal check or money order for the net amount of the overpayment, CPD will proceed with recovery via payroll deduction (in accordance with <em>Section IV. Collection Process</em> below). Recovery in this circumstance will be made at the minimum deduction cited below until the overpayment is fully satisfied.

Overpayment is recoverable immediately upon notification. If the debt is not repaid upon receipt of notice, subsequent pay will be garnished until there is complete recovery of funds (in accordance with the minimum deductions outlined in <em>Section V. Repayment Installments Through Payroll Deduction</em> below). Agencies must obtain the employee’s signature on a memo acknowledging the payroll deduction. An employee who fails to do so may be terminated.

Regular employees with annual base salaries of $60,000 or more: $100 per biweekly pay;

All other regular employees paid on a biweekly basis: $50 per biweekly pay; and

Regular employees paid on a weekly basis: $25 per week.

If an employee remains in debt to the City upon separation from the City, this Policy will follow <em><cite data-path="§AM-205-7">AM-205-7</cite>, Separation and Payment at Termination (AM-205-</em>7), which states that “payment for leave will be withheld in an amount equal to the employee’s indebtedness.” If any unpaid balance still remains, the Department of Finance will issue a “Miscellaneous Bill” to the employee. If the employee does not pay the bill, the Collections Division of the City Law Department will file for a judgment against the employee. If the Court finds in favor of the City, the employee’s earnings from any subsequent employer will be garnished until the principal amount (plus court costs, legal fees, and interest) is paid in full.