My former employer, the NYC Department of Education, kept paying me for three and a half months after I tendered my resignation. What is an overpayment?Overpayments are considered paid when received and must be included in the employee's income when received. Department receives reimbursement from former employee (check from the individual made out to UMBC). The Overpayment Worksheet provides the Payroll Office with the information needed to process the overpayment and recover the overpaid funds. If you pay an employee more than they should have received in a pay period, you need to know how to correct a payroll overpayment. This chapter deals with state law provisions identifying, establishing, and collecting overpayments. All states have provisions addressing these matters.