GORDON BILL TO STREAMLINE PUBLIC EMPLOYEE PAYCHECKS CLEARS SENATE COMMITTEE

Mandatory Movement to Direct Deposit to Save $500,000 Annually

TRENTON – Legislation Senator Bob Gordon sponsored to require all public employees to have their pay deposited directly into their bank accounts – as opposed to receiving paper checks – was today released by a Senate committee.

“There are many costly traditions government clings to just because it’s the way things have always been done, and the reliance on cutting physical paper checks to employees is one of those things,” said Gordon (D-Bergen/Passaic). “But there’s a real cost to maintaining those traditions, and they make less and less sense when cost-effective, less wasteful means for paying employees already exist. Direct deposit is already the preferred method for paying employees in the private sector. It’s time the public sector follows suit.”

Currently an option to public employees, the bill (A-720/S-2090) would make direct deposit mandatory for all state employees as of July 1, 2014, and would allow counties and county colleges, municipalities and school districts to make such a change upon passage of a local ordinance or resolution. In addition, employees would be given access to Internet-based information concerning net pay, accompanying information, and W-2 forms, eliminating those paper forms. Employees who can show a hardship would be able to request paper checks and forms.

If enacted, the legislation is estimated to save $295,851 in both fiscal years 2013 and 2014, and $540,043 in FY2015.

According to the state Department of Treasury, approximately 20,000 state employees receive paper paychecks.

“On its own, the savings may appear small, but every penny government can save in administrative overhead is a penny that can be either reinvested in vital programs or returned to taxpayers,” said Gordon. “We should never be afraid to make business-wise decisions because we think they save too little. Every savings we find, no matter how small, adds up.”

The bill was released by the Senate State Government, Wagering, Tourism and Historic Preservation Committee and now heads to the Budget & Appropriations Committee for further considerations.

Related News Releases

Read more releases from Senator Gordon