Payroll

Direct deposit is a safe, proven, and confidential method of receiving payment. Money is electronically transferred from an organization into an employee’s checking or savings account. Montgomery College employees are highly encouraged to elect direct deposit for Payroll Payments (regular biweekly pay) and/or Expense Payments (reimbursements for approved expenses).

If you decline to elect direct deposit via Payment Elections in Workday or cancel an existing direct deposit election, you will receive a live check for all payments. You must certify that you understand the following risks and will abide by the applicable corrective actions:

Delayed Delivery

All live checks are mailed on Thursdays (biweekly payroll) and Fridays (expense reimbursements) via the U.S. Postal Service. Montgomery College has no control over delivery time or accuracy. Ensure your mailing address is correct in Workday.

Stale/Voided Checks

A check becomes stale and void if not deposited within 90 days of the issue date. Deposit checks promptly. Voided checks must be reissued on a regular on- or off-cycle pay date.

Periodic Audits Requiring In-Person Pick-Up

To mitigate risk and reduce fraud, employees who receive live checks will be required to pick up checks in person at a designated location and present government-issued identification to confirm their identity.

Lost/Stolen Check: Not Cashed

If you do not receive your check within ten (10) business days and the check has not been cashed or deposited, you can request a replacement check. Replacement checks will not be processed before the 10-business day window concludes.

Lost/Stolen Check: Cashed but not Received

If you do not receive your check within ten (10) business days and the check has been cashed or deposited by someone other than you, you must complete an affidavit for the College’s bank, confirming that you did not receive, cash, or deposit the check. Replacement checks will not be processed until a full investigation is completed and the bank deems the funds were fraudulently cashed. Montgomery College cannot reissue payment until the bank authorizes us to do so.

If you do not receive your check within ten (10) business days and the check has been cashed or deposited by someone other than you, you must report the fraud to HRSTM, who will coordinate with Office of Business Services (OBS) and the College’s financial institution for restitution. You will need to complete an affidavit for the College’s bank confirming that you did not receive, cash, or deposit the check. Replacement checks will not be processed until a full investigation is completed by our financial institution and the bank deems the funds were fraudulently cashed. Montgomery College cannot reissue payment until the bank authorizes us to do so. This process can take up to 45 business days.

If your paycheck was deposited into your bank account before you were informed about fraudulent activity on your account, you must report the fraud to your financial institution for restitution. Many times, they can move the funds from the compromised account to a new account. If this is not possible, you must work with your bank to send the funds back to the College so we can reissue them to a new account. We cannot reissue payment until we receive the original deposit back. This process can vary from bank to bank, but typically is settled within three (3) business days.

As a reminder, direct deposit is a safe, proven, and confidential method of receiving a payment. Money is electronically transferred from an organization into an employee’s checking or savings account. Montgomery College employees are highly encouraged to elect direct deposit for Payroll Payments (regular biweekly pay) and/or Expense Payments (reimbursements for approved expenses). Direct deposit takes much less time to resolve issues involving compromised accounts or fraud than with live checks.

View the Payment Elections job aid (English, (PDF, ) Spanish (PDF, ) ) for assistance.

General Standards

FICA (Social Security and Medicare) taxes do not apply to services performed by students employed by a school, college, or university where the student is pursuing a course of study.

Exemption from FICA tax is provided to Montgomery College student employees (i.e., student assistants and federal work study), who meet specific criteria regarding academic enrollment and number of hours worked per week. Student employees who fail to meet the criteria are subject to FICA tax for hours worked.

Under IRS Safe Harbor guidelines, exemption from FICA tax withholding is allowed during the academic year for any student employed on an hourly basis who:

1. is enrolled at least half-time with a minimum of six (6) credit hours,
2. is not a full-time employee,
   
   
3. is not a professional employee,
   
   
4. is not a career employee eligible to receive certain employment benefits or participate in certain benefit plans (e.g., annual time off, statutory retirement, tuition waiver), and
   
   
5. works no more than 20 hours per week as a student assistant and no more than 12 hours per week for a federal work study assignment.

To qualify, the student must have sufficient credit hours recorded in Banner Student to reach at least half-time status for the relevant academic term at the close of business on the last day of the payroll period. The relevant academic term is defined as the academic term (fall or spring) that is in session on the last day of the payroll period, according to the official start and end dates published in the College calendar.

International students are always exempt from FICA tax, regardless of enrollment status.

Graduating Students

A student who is less than half-time will still meet the IRS safe harbor guidelines if the student is graduating. An individual in the last semester or term of a course of study who is enrolled for the number of credit hours needed to complete the degree requirements will still be regarded as at least a half-time student, even if enrolled in less than half the number of credit hours required of full-time students.

Summer Break

With the exception of international students, all other student employees working during the summer months (i.e., the 12 weeks and six (6) pay dates occurring after the end of the closing academic year and before the beginning of the new academic year) will not be exempt from FICA tax, regardless of enrollment status.

Legally, you must request an adequate amount of taxes to be withheld from wages, file tax returns in a timely manner, and pay taxes you owe. Under-withholding taxes can result in owing money when filing your federal tax return and a possible penalty. If too much is withheld, you will generally receive a refund.

The IRS has a Withholding Compliance Program that begins with a self-correcting letter, known as a 2802C Letter. The goal of this letter is to have the taxpayer self-correct by completing a new Form W4. Taxpayers may receive this letter if they are claiming Exempt status or if the taxes being withheld from income are insufficient. Those who claim Exempt must do so each calendar year by completing a new From W-4 before February 15.

If the IRS determines that you are not in compliance and do not have adequate withholding, they can instruct your employer to withhold federal income tax at an increased rate by issuing a “lock-in letter.” At that point, your employer must disregard any Form W-4 that decreases the amount of your withholding by deducting the maximum amount allowed, and cannot change that maximum withholding deduction unless the IRS provides approval in writing.

You can change your Withholding Elections at any time, including the federal Form W-4, in Workday (Pay ® Actions ® Withholding Elections). You should also complete a new Form W-4 and/or applicable state withholding form when you have applicable life changes, such as moving to a new state, marriage, divorce, birth or adoption of a child, or a major change in wages.

Additional information can be found at www.irs.gov/2802.

When Montgomery College receives written documentation from any government agency regarding garnishments, support orders, or Internal Revenue Service (IRS) "lock-in letters" (mandatory Federal withholding instructions that “lock” the maximum federal withholding deductions until further notice), we cannot cancel the deduction(s) until we receive documentation from the issuing agency instructing us to cancel them.