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Payroll and Compensation
Procedure No. 4-40
Issued 7/2001
  1. Mission Statement
  2. The mission of Payroll and Compensation is to pay every employee accurately and on time, every time.

  3. Duties
  4. The Payroll and Compensation office has the responsibility for preparing the payroll for all employees. All pay is distributed by Payroll and Compensation on a semi-monthly basis.

    Payroll and Compensation is responsible for the maintenance and verification of gross earnings. The office is responsible for maintaining W-4 and Earned Income Credit records for withholding purposes. The office maintains records of other payroll deductions including retirement contributions, annuities, union dues, association dues, charity, savings bonds, insurance, tax-free parking, campus recreation, and any other deductions sanctioned by the university.

    Payroll and compensation prepares and issues all federal and state income tax withholding statements (W-2 forms).

  5. General Information
  6. Payroll and Compensation provides information relating to payrolls or individual employees’ earnings only to authorized individuals. The office furnishes outside state and federal agencies with statistical information upon request. Other information includes earnings statements for individuals seeking wage verification and sick leave and vacation records.

    NOTE: The most current version of this document is available on the HRS web site.

  7. Pay Period -- Payday
  8. All employees are paid on a semi-monthly basis with pay periods from the 1st to the 15th and the 16th to the last day of the month. Paydays are the 1st and 16th day of each month except when those days fall on either a Saturday, Sunday, or holiday. In that event payday will be on the last university business day preceding the normal payday.

    Payroll checks and direct deposits of pay will not be released until the scheduled payday for each pay period.

    All timecards not properly completed may not be processed until the next payroll.

  9. Timecards -- Timecard reporting (Hourly Employee)

    1. Overtime to be paid must be shown on the timecard on the appropriate line.
    2. Holidays, funeral leave; military leave, jury duty, and any other authorized leave will be paid on the basis of the employee’s normal workday.
    3. Time must be reported to the nearest one-tenth (.1) of an hour. Do not use fractions, i.e., ½, ¼, etc.
    4. If a night shift or temporary classification change rate is to be paid, circle the hours the differential applies to. On the back of the timecard the differential rate, hours, and type should be shown. The supervisor’s signature is also required to approve the payment of a differential. The rates used must be those authorized by the Human Resource Services Office.
    5. Timecards must be completed daily, totaled, signed by the employee and supervisor in ink, and returned to Payroll and Compensation no later than 4:30 p.m. on the first work day following the completion of a pay period.
    6. Timecards must be returned to Payroll and Compensation in the same order as they were sent out – the entire department in alphabetical order. Normally, Payroll and Compensation will not contact departments about missing timecards.
    7. The timecards to be used should be those pre-printed by Payroll and Compensation. Blank timecards may be filled in and submitted only with the prior approval of Payroll and Compensation.
    8. No employee is expected to sign a blank timecard and all changes to timecard hours should be initiated by the employee and supervisor.

  10. Holidays
  11. An employee may receive payment of sick leave for a time prior to or immediately following an approved vacation or holiday period if the supervisor specifically approves the sick leave hours on the employee’s timecard. To be eligible for holiday pay, an employee must have worked or been on pay status the last scheduled work day prior to and following a holiday. Scheduled workdays are determined by the supervisor. Supervisors may withhold holiday pay from an employee who is absent immediately before or after a holiday (or holidays) when the absence is not excused by making a notation "unauthorized absence" on the employee’s timecard.

  12. Unclaimed Payroll Checks
  13. The employing departments are responsible for making the distribution of paychecks to their employees and should make every effort in seeing that the employees receive payment on a timely basis.

    Departments which are unable to locate the employee to make payment within a sixty (60) day period should return the warrant to Payroll and Compensation with a short explanation of why the check could not be delivered to the payee.

    Payroll checks returned after the sixty (60) day period or appearing on the outstanding list after a sixty (60) day period are subject to review by the Internal Audit Office.

  14. Unemployment Compensation Procedures
  15. Any unemployment correspondence received by any university department should be forwarded as soon as possible to Payroll and Compensation. The university has ten working days to reply to the Unemployment Compensation office. It is university policy to challenge all unwarranted benefit claims.

    Upon receipt of a claims application form, Payroll and Compensation will complete the information requested from HRS computer files and consult the employee’s file folder if they are not a student employee. Consultation with the Contracts, Records and Reports personnel may be required.

  16. Overtime
  17. Eligible non-exempt Civil Service employees and student workers are paid overtime at the rate of time and one-half whenever they work in excess of 7.5 hours in a day or 37.5 hours in a week.

    NOTE: Students should not be worked overtime. Non-exempt Civil Service employees may receive time and one-half or double time depending on contract coverage.

    NOTE: Some Civil Service personnel under negotiated contracts must work in excess of 8 hours per day in order to be eligible for overtime pay.

  18. Compensating Time Off
  19. An hourly paid employee in a status position is eligible for compensating time off in lieu of overtime payment at the rate of time and one-half for all time in excess of 7.5 hours per day, with mutual agreement of supervisor. The maximum amount of compensating time accrued may not exceed the equivalent of 112.5 hours (15 workdays) for those on a 37.5-hour work week or 120 hours (15 workdays) for those on a 40-hour work week. It will be the responsibility of the departmental supervisor to file a Compensating Time Record form with the Payroll and Compensation Office each pay period an employee uses compensating time. This form is available on the HRS web site .

    Employees who leave the university with accrued compensatory time will be paid in their last paycheck as is done with vacation pay. Such payments will be based on the employee’s earning rate as of the time of separation, or the average of the last three years, whichever is greater.

  20. Monthly Benefit Usage Report
  21. Monthly Benefit Usage Reports, provided by Payroll and Compensation are to be completed and returned to Payroll and Compensation within five working days after the completion of the pay period.

    Non-worked time other than vacation and sick leave is reported as follows:

    1. Absent Without Pay: The supervisor of employees who are absent from their job duties without leave to cover the time lost must contact the Contracts, Records, and Reports Office. The Contracts, Records, and Reports Office will then process leave without pay papers to Payroll and Compensation for proper wage deductions.
    2. Funeral Leave: When it is necessary to use "Funeral Leave," make a notation on the front of the card showing dates you were absent and relationship of deceased family member.
    3. Jury Duty: When serving on a jury, please note the dates you served on the front of the card.
    4. Military Leave: Should you require to perform "Military Training," a copy of your "orders" from the appropriate military unit must be filed with the Contracts, Records, and Reports Office before the leave begins.

  22. Authorization
  23. No person’s names may be placed on a payroll without proper authorization on file with Payroll and Compensation.

    The Provost prior to payment must approve faculty notices of employment providing authorization to place a faculty member on the payroll.

    Graduate assistants must have assistantship papers processed through the Graduate School and signed by the Dean of the Graduate School. The dean with his written signature must also approve extra payments.

    Employment authorization notices for all civil service positions, including part-time, full-time, temporary, permanent, exempt or non-exempt, must be processed through the Contracts, Records, and Reports office.

    Authorization for both college work-study and regular student employees must be obtained through the Student Employment Office by submitting the appropriate eligibility forms. These eligibility forms are available in the Financial Aid Office. See procedure 25-1 for non-work-study employment procedures and forms and refer to procedure 25-2 for work-study student employment procedures and related forms.

    NOTE: Students may not begin working until their eligibility has been verified and the authorization approved.

  24. Additional Compensation
  25. Authorization for additional pay must be secured before payment can be made, regardless of the source of funds. Authorization is required for any individual who has been on a university payroll within the calendar year. It should be noted the honorariums are applicable only to persons not connected with the university and are paid through the Accounting Office.

  26. Other Compensation
  27. Other compensation (such as reimbursement for moving expenses) paid through the Accounting Office will be reported to Payroll and Compensation and included on the employee’s W-2 statement. The personal use of assigned university vehicles is taxable and will also be included on the employee’s W-2 statement. Employee tuition waivers, if pay taxable, will be included on the W-2 statement.

  28. Electronic Direct Deposit of Pay
  29. Electronic direct deposit is policy for all employees. Earnings statements will be sent to the employee’s department before payday when the direct deposit is imminent. An authorization form with a void check or void savings deposit form, if pay is to be deposited in a savings account, must be filed with Payroll and Compensation in order to begin the process. A Direct Deposit Form (Authorization agreement for automatic payment) may be found at and is also available at Human Resources.

  30. Authorization Deductions
  31. An employee may authorize the withholding of a portion of their salary for the purpose specified in the State Salary and Annuity Withholding Act, (III. Rev. Stat. Ch. 127, secs. 351-60). In accordance with the provisions of said Act, no portion of an employee’s salary may be withheld to pay premiums on life or accident and health insurance policies issued by one insurance company unless a minimum of 100 university employees insured by such company have authorized such withholding. Withholding from salaries for other purposes authorized by the Act shall be governed by the regulations of the Board of Trustees. All withholding authorizations must be on forms prescribed by the university and must conform to all of the requirements of the State Salary and Annuity Withholding Act.

    The following rules would apply:

    1. All deductions must be deducted on the pay period basis adopted by the university.
    2. An authorization for a payroll deduction will be effected no later than the pay period following the current pay period after receipt in Payroll and Compensation. The authorization form must be prescribed form(s) of the university and must be completed and signed by the employee.
      1. Revocation of payroll deduction requires the employee to complete and sign the prescribed authorization card available at Payroll and Compensation. Revocation will become effective no later than the pay period following the current pay period after in Payroll and Compensation.
      2. Payroll deduction adjustments require the submission of a new payroll deduction authorization, (if the deduction amount is changed for all employees, the new authorization may be waived.)
    3. Solicitations by insurance companies, union organizations, associations, etc. will not be conducted on university premises without prior administrative approval of the Vice President for General Administration.
    4. An insurance company offering life or accident and health insurance policies that has permission to solicit business on university premises must secure at least 100 university employee withholding authorizations to be accepted by Payroll and Compensation.
    5. Companies or organizations conducting solicitations, unless approved by the Board of Trustees and/or university administration, will not state nor imply directly or through advertising and solicitation materials that the university sponsors or approves of the plan.
    6. The university may discontinue withholding from salaries to pay to one insurance company premiums on life or accident and health insurance policies at any time that university employee withholding authorization for that company shall number less than 100. The university will notify the company that the participation is less than 100. The insurance company will have six months after notification to bring the enrollment up to the minimum number.

    Currently, deductions are authorized for group insurance, group medical, term life, dental insurance, savings bonds, union dues, credit union, charity, dependent care, medical care, NIU Foundation, and NIU Athletic Association.

    Aetna Group Accident Insurance – This coverage has a fixed premium to be deducted once each pay period. Additional information and necessary forms are available in the Insurance and Employee Benefits Office.

    Medical and Dental Insurance – This coverage has a fixed premium to be deducted each pay period. The State of Illinois pays a portion of this premium. The premium varies according to the marital status, number, and ages of the participants. Additional information and the necessary forms are available in the Insurance and Employee Benefits Office.

    Reliastar Term Life InsuranceThis is a low-rate term life policy for employees and their families. The premium, which is deducted once each pay period, depends upon the number and ages of those covered. Additional information and the necessary forms are available in the Insurance and Employee Benefits Office.

    Savings BondsSavings bonds may be deducted each pay period in any amount which meets the bond purchasing requirements. Bonds purchased at any time during the month earn interest from the first of that month. Additional information and the necessary forms are available in Payroll and Compensation. There are two types of bond programs: Series EE traditional and the I inflation bond.

    Union Dues – Any information concerning union dues, deductions, policies, or procedures should be addressed to the local chapter president or union steward.

    Charity – Charity deductions can be made each pay period for the NIU Foundation, Kishwaukee Habitat for Humanity, NIU Athletic Association, the DeKalb or Sycamore United Way, and the State Universities Employees Combined Appeal. Contributions of as little as $1.00 per pay period may be made; there is no maximum contribution.

    Credit UnionArrangements for credit union deductions should be made at the Credit Union Office.

    Campus RecreationEmployees may pay membership fees to campus exercise programs via payroll deduction. Contact the Office of Campus Recreation.

    Tax Free ParkingCampus parking permit fees paid via payroll deduction are pre-tax and not included in taxable gross on the W-2 statement. Contact the Campus Parking Office for details.

  32. Tax Deferred Annuities
  33. The State of Illinois and the Board of Trustees authorize several different investment companies for payroll salary reduction. By having salary reduction, an individual’s taxes are calculated on the gross dollars less the annuity amount. Also, the gross dollars earned on the employee’s W-2 form are the gross dollars earned less the annuity amount, or the taxable gross.

  34. State Universities Retirement System
  35. Employees eligible and participating in the State Universities Retirement System are required to contribute a percentage of their gross pay. Payroll and Compensation makes this employee contribution automatically when the Contracts, Records and Reports Office forward the proper forms.

    The retirement contribution is considered to be "picked-up" by the employer and is not taxable income for the purpose of calculating withholding taxes or W-2 wages.

  36. Social Security (Medicare)
  37. Except for registered students, all employees who begin employment after March 31, 1986 are subject to a deduction for the Medicare portion of social security (FICA) taxes, and effective 7-1-91 some employees not eligible for SURS may be subject to full social security taxes. Students working during the summer but not taking classes will be subject to full social security taxes.

  38. Federal Withholding Taxes
  39. Federal income tax will be withheld on a graduated basis to a greater or lesser degree dependent on the marital status and number of exemptions claimed by the individual on the W-4 form filed in Payroll and Compensation. Special withholding based on a percentage of taxable wages rather than exemptions is available. Special withholding can only be used if the resultant tax exceeds the normal tax which would be withheld for the employee. An NIU W-4 form is available from payroll or may be downloaded from the HRS web site

  40. Employees from Foreign Countries
  41. Based on a substantial presence test, employees from other countries are determined to be either in a resident or non-resident alien tax status. Appropriate withholding of taxes is then applied based on the relevant tax status.

  42. Deceased Employee Benefits
  43. Any earnings due an employee at the time of death will be paid to the employee’s estate. Certified death certificate and small estate affidavit (where no estate is opened) or letter of administration or testamentary (where payee decedent's personal representatives) must be presented at Payroll and Compensation to secure this payment. Benefits due from the retirement system (if the employee was an eligible participant) will be paid upon presenting the same proof documents to the Insurance and Employee Benefits Office. Additional details are available at the Insurance and Employee Benefits Office.

  44. Earnings Record
  45. Payroll and Compensation maintains a record of contributions, deductions, and earnings of all university employees. This information is available to any employee desiring their earnings record. Employees may secure this data via mail or in person, but not by telephone. Employees should retain their earnings statements for future reference.

  46. Lost, Stolen or Destroyed Checks
  47. If a paycheck has been lost, stolen, or destroyed, this fact should be reported to Payroll and Compensation immediately. Payroll and Compensation will arrange for a stop payment on the original check. A duplicate check will be written as soon as verification has been received from the bank that the original check has not been cashed and an affidavit has been signed by the employee stating that if the original check is found it will be returned to Payroll and Compensation.

  48. Advances
  49. There are no payroll advances for persons currently on a payroll. State law prohibits payments being made before the completion of a pay period.

  50. Payroll Changes
  51. Changes of rate, classification, source of pay and working location must be processed through the Student Employment office, the Contracts, Records, and Reports Office and the Graduate School. These offices will forward the appropriate form authorizing such changes to Payroll and Compensation. Insurance deductions and annuity deductions are processed through the Insurance and Employee Benefits Office. Changes of name and address are processed through Contracts, Records, and Reports Office. Social security number, marital status, number of exemptions, withholding tax, deductions, and check distribution are processed through Payroll and Compensation.

  52. Payroll Cut-Off Dates
  53. Cut-off date for changes and placing new non-exempt employees on a payroll is normally the sixth working day following the end of a pay period. However, please refer to the payroll schedule for the exact day.

    Changes on faculty and administrative civil service employees pertaining to name, marital status, number of exemptions, deductions, reductions, department location, check distribution or charge are to be made by the third working day of the current pay period. Normally, changes in salary and additions to the payroll are to be made no later than the third working day of the pay period. However, changes to the schedule do occur and reference should be made to the published payroll schedule.