TRENTON) – Legislation sponsored by Assembly Democrats Ruben J. Ramos Jr., Matthew W. Milam, Connie Wagner, Annette Quijano and Paul Moriarty to save more than a half-million dollars per year by modernizing the state’s payroll system was approved 33-1 Thursday by the Senate.
The bill (A-720) requires direct deposit for all state employee compensation on and after July 1, 2014, and allows counties and county colleges, municipalities, school boards to opt for mandatory direct deposit for all employee compensation on or after July 1, 2014.
The bill eliminates administrative costs associated with mailing pay stubs to employees by requiring that all pay information now be available online via the employee’s assigned e-mail address.
“It’s the 21st century and it’s time the state of New Jersey began acting like it,” said Ramos (D-Hudson). “There’s no excuse as to why the state insists on physically mailing pay stubs that are sealed in an envelope, printed on paper, stamped and labeled. This is a recurring administrative cost that the state incurs for thousands of employees.”
“Employees receiving direct deposit that have an e-mail account with the state should simply be able to access their pay and tax information in the office or at home,” said Milam (D-Atlantic/Cape May/Cumberland). “Let’s save money by moving past the outdated methods of the past.”
Under this roll-out, the treasurer will also have the authority to provide exemptions and waivers for certain employees and departments that cannot accommodate the technological requirements. By fiscal year 2015, the plan could save an estimated $540,000 per year.
“Numerous banks offer free checking with direct deposit,” said Wagner (D-Bergen/Passaic) “This is a commonsense, cost saving measure.”
“Any plan that can save a half-million dollars per year without disrupting state services is worth doing,” said Quijano (D-Union). “With finding costs savings so vital, this is a must.”
“Most people today have direct deposit and manage their accounts online. It’s efficient, avoids paper clutter and will save the state quite a lot of money. It’s a win-win,” said Moriarty (D-Camden/Gloucester).
The bill was approved 79-0 by the Assembly in June. The Assembly will need to consider it a final time because of amendments that clarify that a specific exemption to mandatory direct deposit of net pay may be granted for employees who are seasonal and temporary employees, and that employee W-2 forms would be provided to employees on the Internet in accordance with applicable federal law. Additionally, the bill, as amended, would allow the governing body of a local school district to grant an exemption from the mandatory deposit on such terms and conditions as they deem necessary.