Effective: April 1, 1999
Responsibility: Vice-President and Chief Financial Officer
- Appendix A – Procedures and Guidelines
- Appendix A-1 – Guidelines for Establishing Likelihood of Collectability
- Appendix B – Salary and Related Receivables
- Appendix C – Check List for Departing Employees
- Appendix D – Cash Discounts
- Appendix E – Credit Application Form
- Appendix F – Guarantee of Payment Form
Corporate Payroll Shared Services will be responsible for the follow-up and recovery of all salary and related receivables processed through the Corporate Payroll department, in accordance with the established Procedures and Guidelines.
OTHER EMPLOYEE RELATED RECEIVABLES
Approval of Employee Receivables/Loans and Recovery Schedule
Employees of the Corporation are only eligible for personal loans in accordance with Corporate Policies (Finance and Administration) 2.3.10 – Employee Relocation Loans and (Human Resources) 2.2.13 - Relocation.
However, on occasion, employees are overpaid through the payroll process for various reasons or may be issued advances even though there has been no disruption in the bi-weekly salary process. When such events occur, there are two options for recovery:
- Immediate recovery from the employee for 100% of the amount in question
- Recovery over a period of time through payroll deductions based on established guidelines and/or approved negotiated terms and conditions
Under the first option when the amount in question is recovered 100% immediately from the employee, the employee receivable will still be recorded.
However, when the recovery is over a period of time, an employee receivable has to be set up in SAP. This transaction constitutes a loan to the employee, which will be reflected on the Balance Sheet of the Corporation and the terms for recovery, must be in accordance with the approved “Recovery Schedule” below and must be approved by the VP and CFO or delegate.
If interest is not charged on employee loans at fair market value rates (CRA publishes prescribed rates), the employer is responsible for recording the difference between the prescribed interest and the actual interest charged on the loan as a taxable benefit for income tax purposes on the employee's T4/Releve 1 each year while the loan is outstanding.
Shared Services has the responsibility to ensure that the recovery process is initiated immediately and is in accordance with the approved Recovery Schedule. Any deviation from the approved Recovery Schedule must have the prior approval of the VP & CFO or delegate (the Senior Finance and Administration Directors in Ottawa, Montreal and Toronto, their delegates, or the Regional Comptrollers).
Shared Services will produce monthly aged analysis reports of the VIP employee receivable amounts for monitoring and follow-up and a copy will be provided to the Director, Accounting & Corporate Reporting.
Shared Services must also ensure that the guidelines/steps outlined under the Follow-Up and Collection section below are followed.
APPROVED RECOVERY SCHEDULE
The following describes the recovery process to be followed by Shared Services regarding employee receivables, created as the result of the processing of employee regular pay and pay revisions.
For receivables less than $5.00
- All employee receivables less then $5.00 created in a given month are written-off once a month by Shared Services.
For receivables between $5.00 and less than 10% of gross regular pay
- Receivables more than $5.00 but less than 10% of gross regular pay are recovered by Shared Services on the employee’s next pay with a message on the pay stub. For Foreign correspondents, their collective agreements state that the correspondents must be informed before any recovery is initiated. For correspondents paid by VIP, the national compensation area will advise the correspondents before recoveries are initiated (recovery will be from a single pay). For correspondents in USA, the national compensation area will add a message to the statement of earnings for the month in which the recovery is made.
For receivables more than 10% of net regular pay but less than $2,000.00
- Receivables more than 10% of net regular pay but less than $2,000.00 are recovered by Shared Services at the minimum rate of 10% of regular net pay on a maximum of 10 pays starting on the employee’s next pay. If one-time lump-sum payments are due to the employee during this period, receivables shall also be collected against these amounts. A written communication (a letter, an E-Mail or a note attached to the employee’s Notice of Deposit (NOD) is sent to the employee informing him/her of the nature of the receivable and the repayment schedule indicating the number of pays and the amount per pay.
For receivables of $2,000.00 and more
- For receivables of $2,000.00 and more, Shared Services must contact the employee immediately to explain the situation and provide documentation and proof supporting the amount owing. If the amount is not recovered immediately, the employee should be advised of the proposed recovery schedule – a minimum rate of 10% of regular net pay on a maximum of 10 pays starting on the employee’s next pay. If one-time lump-sum payments are due to the employee during this period, receivables shall also be collected against these amounts. If the employee requests a longer repayment schedule, Shared Services must consult with and obtain the approval of the VP & CFO or delegate before confirming the revised schedule with the employee. Shared Services must follow-up with a letter to the employee confirming the discussion and the revised repayment schedule. If the employee cannot be reached by phone, a letter is sent requesting the employee to communicate with Shared Services; if the employee does not reply within a week, recoveries are initiated at the rate of minimum 10% of regular net pay on a maximum of 10 pays. All communication and copies of letters etc. must be documented/kept in the employee’s pay/recovery file and a copy sent to local Human Resources.
For receivables, which have been identified as outstanding for more than one year, Shared Services will endeavour to follow the above procedures. However, there may be cases where Shared Services, with the prior approval of the VP & CFO or delegate, may be allowed some room to negotiate with the employee a recovery payment period outside the established recovery schedules in the above procedures.
Corporate Human Resources
Eligibility for housing relocation loans will be determined in accordance with Corporate (Human Resources) Policy 2.2.13 – Relocation, for which the Senior Vice-President, Human Resources and Organization is responsible. The Corporate Manager, Relocation is responsible for the management, interpretation and application of the policy. All requests for such loans must be processed through Head Office.
The Corporate Manager, Relocation is responsible for the following:
- Obtaining authorization from the new supervisor (in the new location) of the employee being considered for a housing relocation loan;
- Providing advice and guidance to determine whether employees are eligible for the housing relocation loans;
- Determining the amount of the loan as a result of the comparative value report;
- Obtaining the required financial information from the employee to prepare the loan request;
- Preparing and submitting the loan request/proposal to the Senior Vice-President, Human Resources and Organization and the Vice-President and Chief Financial Officer for approval and authorization;
- Advising Corporate Finance to issue the loan cheque to the employee’s lawyer, in trust, for the close on the property purchase;
- Collecting the loan monies from the employee on the due date.
Corporate Finance and Administration
All requests for housing relocation loans must be approved by the Senior Vice-President, Human Resources and Organization and the Vice-President and Chief Financial Officer at Head Office, in accordance with Corporate (Finance and Administration) Policy 2.3.10 – Employee Relocation Loans.
Cheques pertaining to approved loans will be issued by the National Payment Centre (NPC) at Head Office, while the Regional Comptroller for the National Capital Region in Ottawa will monitor the loan balances and provide reports to the Corporate Manager, Relocation in Ottawa indicating the names and amounts owing by employees and the dates the loans are due.
Local Human Resources
The managers of the Regional and Network Human Resources offices are responsible for the following:
- Ensuring that employees are provided with a copy of Corporate (Human Resources) Policy 2.2.13 - Relocation
- Determining whether employees are eligible for a non-taxable relocation allowance and whether they require an advance against the move.
- Ensuring that the employee is aware of the requirement to withhold income tax against the salary portion of such an advance.
- Obtaining the required approvals from the employee’s supervisor (in the new location) for the approval of eligible advances.
- Submitting an approved travel claim to NPC for such an advance
- Ensuring that the manager of Local Human Resources in the new location is provided with documentation to prevent duplicate issuance of relocation advance cheques
- Follow-up with the employee in accordance with the timeframe identified in the policy to ensure that the employee submits the final settlement claim, especially if advances were given to the employee (this is the responsibility of the Local Human Resources manager in the new location)
Corporate (Finance and Administration) Policy 2.3.23 – Travel Management states the following: “The Corporation does not provide travel advances. Employees may have direct access to cash through the approved Corporate Travel Card. Deviations from policy MUST be approved by the local Senior Finance and Administration Officer.”
In order to avoid potential problems associated with the conversion of money, the fluctuating exchange rates and in particular with banking restrictions placed on the trading in US dollars by the USA and by other foreign countries, all requests for travel advances in US dollars and other foreign currencies will be converted to Canadian funds. In the rare and extreme occasion where the US dollar is the only accepted currency, US dollars will be provided to the employee.
In instances where travel advances are issued (usually for major sporting events such as the Olympics, Commonwealth Games, etc. where the employees would be away for unusually long periods of time, travel to the USA or to casual employees who have not been issued a Corporate Travel Card), all requests must be approved by the Senior Finance and Administration Officer or his/her delegate in the location. For major events, such as the Olympics, the Network Finance and Administration Officers may approve the requests.
The Senior Finance and Administration Officer in each location is responsible for the follow-up and settlement/collection of all travel related receivables for employees in their location, regardless of the origin of the approved advance or the location of the employee’s supervisor. If advances are issued in one location for an employee whose home base is in another location, the Senior Financial Officer in the issuing location must advise the Senior Financial Officer in the home base location of all such advances.
NPC is a payment-processing centre and as such is not responsible for the follow-up and collection of amounts owing by employees. However, if they are requested to assist in the recovery of amounts owing (including salary and related), they should be copied on all follow-up correspondence.
In order to assist in the follow-up function, the “Group Key” field will be used to identify the location when creating vendor numbers. NPC will ensure that this field is used for this purpose. The codes to be used are as follows:
GROUP KEYS - LOCATIONS
|Region||Group Key on Vendor Master Record|
Local Finance and Administration
The Senior Finance and Administration Officer in each location must approve all requests for cash funds, which include the following:
- Petty Cash Funds
- Production Funds
- Emergency Travel Funds
- Standing Travel Funds (in rare circumstances and only to frequent travelers required to travel extensively and who have not been offered/issued a Corporate Travel Card)
Such funds must be managed in accordance with Corporate (Finance and Administration) Policy 2.3.4 – Cash Funds. This includes the recovery of such funds from the employee’s pay or from monies owing to the employee when they leave the corporation.
In normal circumstances, the department who approved the transaction, which generated the employee receivable, will be responsible for the follow-up and collection of such receivables. Human Resources is responsible for salary and related transactions, relocation advances and housing loans, while Finance and Administration is responsible for cash funds, travel advances and standing travel advances. However, regardless of the department responsible for follow-up and collection, the following process must be followed:
The appropriate department is responsible for the creation of a file containing documentation and correspondence to support the amount owing by the employee and the following actions must be followed:
For employees still employed by the Corporation:
- Meet with or place a phone call advising the employee of the amount owing and confirm the details in an e-mail, memo or letter with a copy to the employee’s supervisor.
- In the case of overpayments, the employee should be requested to repay the amount in full immediately.
- If there are extenuating circumstances and valid reasons as to why the overpayment amount cannot be recovered in full immediately or in accordance with the approved Recovery Schedule, the onus is on the employee to propose a repayment schedule to the designated person in Shared Services, who must consult with Finance and Administration before meeting with the employee to finalize the repayment period.
- If an extended recovery period is being considered, the following should be taken into account:
- The cause of the overpayment
- The status of the employee (permanent, temporary, casual, etc.)
- The impact on the program budget or department budget
- Full recovery within the current fiscal year
For employees to be separated from the Corporation:
- It is the responsibility of the appropriate Human Resources department to ensure that the “Check List For Employees Separating From The Corporation” (available from all Finance and Administration and Human Resources offices) is sent to the appropriate manager and Finance and Administration department for follow-up and action, in order to ensure that all amounts owing by employees are recovered from the final payments to those employees. Final payments should not be processed until the list has been received from Finance and Administration.
For employees who have separated from the Corporation:
- Meet with or place a phone call advising the employee and providing details/proof of the amount owing, requesting payment or making arrangements for full recovery
- If the former employee does not respond or if direct communication is difficult, send a registered letter requesting payment within ten (10) days or ask the individual to contact you immediately in order to make arrangements for recovery
- If the individual does not respond within ten days, send a second and if required, a third registered letter. The third letter should indicate that if the amount is not paid in full within ten days or if the individual does not contact you to make arrangements for recovery, the matter will be referred to a collection agency for further action.
Regardless of the status of the employee, if there is no response to follow-up attempts, the outstanding amounts will be referred to a collection agency for further action.
In the case of former employees who have passed away, and if the amounts owing are significant, a claim may be made against the Estate of the former employee. If collection efforts are not successful, the Senior Finance and Administration Officer should submit a formal request to the Vice President and CFO to have the outstanding amount written off. All such requests should indicate the date the former employee passed away as well as all documentation pertaining to collection efforts, if any, including the cost centre to which the amount is to be charged.
Except in unusual circumstances, amounts to be written-off will be absorbed by the appropriate VP component. Authorization to write-off an amount must be done in accordance with Corporate Policy 2.3.8 – Delegation of Financial Authorities.
Immaterial amounts ($25.00 or less) owing to the Corporation or balances owing to the employee, should be automatically written-off by the appropriate Senior Finance and Administration Officer.
Tax issues (i.e. taxable benefits) associated with amounts considered for write-off should be discussed with the appropriate Finance and Administration Tax Advisor at Head Office before a decision is made and communicated to the employee.
All other requests for write-offs must include all of the pertinent information as indicated on the Employee Receivables Request for Write-Off Report. All such requests should have the appropriate recommended approvals as per the following guidelines:
|A. SALARY AND RELATED|
|Less than $1,000||1. HR Manager||Recommends|
|2. Finance Director||Recommends|
|3. Vice-President & Chief Financial Officer||Approves the write-off|
|Between $1,000 and $5,000||1. Senior HR Director||Recommends|
|2. Finance Director||Recommends|
|3. Vice-President & Chief Financial Officer||Approves the write-off|
|More than $5,000||1. Senior HR Director||Recommends|
|2. VP Media/Support Component||Recommends|
|3. Vice-President & Chief Financial Officer||Recommends|
|4. Sr. VP Human Resources and Organization||Internal HR approval|
|5. Vice President and CFO||Approves the write-off|
|B. RELOCATION LOANS AND ADVANCES||Network Directors, Finance and Administration||Recommends|
|Vice President and CFO||Approves the write-off|
|C. CASH FUNDS AND TRAVEL ADVANCES||Network Directors, Finance and Administration||Recommends|
|Vice President and CFO||Approves the write-off|