The Quest to Eliminate Paper Payroll Checks!

 

In March of 2012 the Washington State Senate passed bill 3SHB 2585 enabling, among other efficiencies, institutions of higher education to mandate direct deposit of employee’s pay. We are currently in the process of drafting policy language to implement this bill, including a viable alternative for employees for whom direct deposit is not an option.

Background:

Currently, 95% of employees participate in direct deposit. However, for the 5% of employees that still receive paper checks, the cost to the University is high. The average cost to print and distribute paper checks is more than $213K per year, with most of that cost related to effort in units to distribute checks to employees. Implementation of this element of the bill is consistent with our ongoing efforts to reduce costs, eliminate inefficiencies and administrative burden. However, we also understand that some degree of flexibility is critical, thus the concurrent effort to establish an alternative. In addition, employees, such as students and new employees, who often receive their first one to three paychecks on paper, will continue to be processed.

What We’re Doing:

To kick off our efforts, beginning September 2012, the UW Payroll Office began a campaign encouraging individual employees still receiving paper checks to enroll in direct deposit. The initial response has been very encouraging with a number of those employees converting to direct deposit. We’ll now move ahead to finalize policy guidance to communicate the general requirement for direct deposit and the process for seeking exception to use our planned alternative (see below). The recent weather events back east demonstrate the significant value of direct deposit. In addition, our own inclement weather in the last few years underscores that value. For example, having employees in units come in on payday in unsafe weather conditions to distribute a small number of paper checks (sometimes just a few) is something we’d like to make a thing of the past. With direct deposit, funds are sent to the employee’s bank account and available by 9:00 am the morning of payday. It is a reliable, safe and efficient mechanism.

We do understand there are a small number of employees for whom direct deposit is not an option. As an alternative, we will establish a paycard program (debit cards where employee net pay is loaded each pay cycle). While not as efficient as direct deposit, and will be processed as an exception, paycards will result in similar cost savings for the UW. Payroll will begin rolling out paycards with a small pilot early 2013.

Next Steps:

We’ll keep you up to date as we move ahead with these changes. In the meantime, where possible, we would strongly recommend that you encourage existing employees to convert to Direct Deposit and new employees to enroll as soon after their appointment as possible. This will eliminate the need for them to change when these policies officially go into effect. We thank you in advance for your support!

For more information regarding this change contact Christa Woodhull at christen@uw.edu or 206-543-9215. The enabling legislation can be found at: http://apps.leg.wa.gov/RCW/default.aspx?cite=41.04.240