Missed FICA Deductions UC is reaching out to inform 1,222 active employees and 1,604 inactive employees of an upcoming correction to their federal payroll tax deductions. This correction will be reflected in active employees’ paychecks beginning August 28 for biweekly paychecks and August 30 for monthly paychecks and may impact employees’ 2024 income taxes.

Due to a system error, UCPath Center did not deduct payroll taxes that are federally mandated for non-student employees when they transitioned from student employment to non-student employment positions. These taxes, known as FICA (for the Federal Insurance Contributions Act), go toward future Social Security and Medicare benefits and appear on earning statements as FED OASDI and FED MED.

UC’s communication to employees extends an apology for the error and explains the steps being taken to correct it and minimize its impact.

What does this mean for employees?

• UC accepts full responsibility for this error and is repaying the federal government for both the employees’ and UC’s share of unpaid FICA taxes, dating back to 2021 or the date the non-student employment position began (whichever is later). Because FICA is a required deduction, UC is addressing this error differently than other errors, such as overpayment of wages. Impacted employees will receive corrected W-2 (W-2c) forms for past years displaying the FICA taxes that have been paid by UC.
• Corrected W-2 forms for past years are for employees’ reference only. Employees’ taxable earnings for 2021-2023 were not affected by this error, and they do not need to refile their taxes for any past year.
• However, the past FICA taxes UC is paying on employees’ behalf are considered “imputed income” by the IRS and will be reflected on their 2024 W-2 forms as taxable earnings. Current employees will receive instructions for how to increase their tax withholding on UCPath to adjust for this additional income if they choose to do so.
• For any questions, please contact UCPath Center by logging in to UCPath Center and selecting Ask UCPath to submit an inquiry. They may also call UCPath Center to speak with an associate at (855) 982‐7284 from 8:00 a.m. to 5:00 p.m. (PT) Monday through Friday.

• Once the root cause was identified, UCPath Center implemented a temporary solution to ensure that, as of April 1, 2024, all former student employees who transition into non-student employment positions have the correct FICA deductions taken.
• UCPath Center identified 1,222 active employees and 1,604 inactive employees as impacted and consulted with UC Legal and leadership to determine the next steps.
• UCPath Center has provided an explanation of the general issue through governance and other groups.
• UCPath Center will distribute a list of affected employees to location controllers and payroll directors.
• Following the employee communication, UCPath Center will activate FICA/Medicare tax withholding for these active employees effective with their August 28 (biweekly) and August 30 (monthly) paychecks.
• UCPath Center will calculate and report under-withholding (employee and employer) to be paid in accordance with IRS requirements.
• UCPath Center will issue corrected tax documents to affected current and former employees in compliance with IRS requirements. The statute of limitations for tax filing is three years from the return date. The affected years within the statute are 2021-2024.
• UCPath Center will implement a long-term system solution to address the FICA process.

New Gender Identity, Sexual Orientation, and Pronouns Options in UCPath As of July 15, 2024, new features that capture an employee's gender identity, sexual orientation, and pronouns, are now available in the UCPath system.

What are some changes I can expect?

• The New Self-Identification Wizard: Upon logging into UCPath, employees will be guided to confirm and update their self-identification details. Employees must update their selections or decline self-identification before accessing self-service features in UCPath.
• Gender Identity Options: Updated terms for gender identity will include selections like Woman, Transgender Woman, Man or Transgender Man.
• Sexual Orientation Options: Categories like Asexual will be available, and the Gay or Lesbian selection has been separated into two distinct options.
• Pronouns Selection: A new feature allows employees to select from a list of pronouns to be displayed alongside their name on certain pages in UCPath.
• Pronouns Visibility: Pronouns will appear alongside employee names in UCPath. This information will only be visible to managers, HR administrators and UCPath Employee Services on pages that display an employee's name. Pronouns will also display when hovering over an employee's name on select UCPath pages.

Resources:

• Review the UCPath July Release: Gender Identity and Pronouns video.
• View a list of Frequently Asked Questions regarding the Gender Identity and Pronouns project.

UCPath July Release: The UCPath July Release is now live! The following projects, in addition to the Gender Identity and Pronouns project listed above, are now live in the UCPath system.

• New SOBO Case Submission Form: The Ask UCPath system will now automatically determine an inquiry's topic and category for users with Submit on Behalf of (SOBO) access. View a list of new features here.
• Former Employee Portal Updates: The Former Employee portal now has a new interface, new functionality, and multi-factor authentication for added security.
• Watch the recording of the UCPath Projects: July Release Topic Based Zoom here.