Electronic Wage Statements

Does anyone have experience in replacing paper wage statements (in our case, biweekly) with electronic statements for employees? We currently distribute a check stub and dummy check to employees who have their pay direct deposited, and I would like to get away from the costly paper report in favor of an e-mail or other electronic approach.

In a related vein, has anyone found an effective way of encouraging “the dinosaurs” to go direct deposit?

Gene O’Sullivan (gosulliv@elliott-turbo.com)

Response:

I have been fighting the same thing at our company for several years. We have the ability to do electronic pay stubs with our software – in fact, to make them available as an alternative, but we get resistance to going paperless. A word of caution:  We are headquartered in California, where it is illegal to force employees to receive pay stubs electronically. If they request paper, you have to give them paper. We plan on rolling out paperless this summer or fall but will give our California employees the choice of opting out of electronic pay stubs.

As for electronic deposits, we have done that for several years. With total employees of slightly more than 4,000, we are now down to about 250 paper checks. Again, California law does not allow you to force employees to take electronic deposits. If they request paper checks, you must give them paper. We have managed this by reminding employees, especially at remote locations where checks are often delayed by the weather, which an electronic deposit gets to their bank when paper cannot.  

We would be interested in your experiences and success in implementing both electronic deposits and electronic pay stubs.

Dale E. Wallis (Dale.E.Wallis@aero.org )

Response: 

We went to online deposit advances through our Ultipro payroll/personnel system over two years ago. It is Web-enabled and has been very well-accepted by employees. An automatic e-mail message is sent out on each pay date advising each employee that it was a pay date and reminding them that they could view this online by clicking on a reference included in the e-mail.  The system allows the employee to print the pay advice, but I’m not sure how many actually do this.   

We have about 1,000 employees on the system. Only 17 still receive paper checks. It is our understanding that state law determines if a company can force direct deposit.

Regarding the “dinosaurs”: We strongly communicated that employees could periodically experience delays in the delivery of paper documents (we pay from one central location), and that electronic deposit and online printing of pay advices would guarantee that the pay would be in one’s checking account on the payroll date. After the original implementation, we did experience two delays in the delivery of paper checks and took the opportunity to reiterate this warning. Each time, more people opted for direct deposit.

Robert R. Scherba (RScherba@williams-int.com )

Response:

I’m familiar with making the transition to electronic statements for employees, as well as some of the issues in dealing with “dinosaurs”. We eliminated hard-copy wage statements a few years ago by purchasing an add-on module to our payroll system. Since that time, I’ve become aware of a service that does this for you without your having to write all the costly interfaces we had to develop. The company is National Payment, and they can be reached online at www.directdeposit.com  or by calling 800-284-0113. They’ve been offering electronic pay stubs for several years and have clients nationwide.

When conducting our root-cause analysis of the “dinosaur” issue, we learned that several of our employees were unable to obtain or satisfactorily maintain checking accounts. We found that direct debit cards could be “prepaid” with an employee’s wages, reimbursements and other payments. This helped us on the domestic front, plus it can also be advantageous to employees posted abroad. The same vendor (National Payment) has solutions available to meet these needs also.

Steven W. Pralle (spralle@icintracom.com)

Response:

State law dictates if you can force people onto direct deposit and also paper or electronic advices. Therefore, you have to check your state law. You can, however, make it a condition of employment when hired; the problem is with existing employees.

In Pennsylvania, we cannot force people onto direct deposit by law. On the other hand, I have heard of companies who issued a memo that all employees must be on direct deposit by a specific date. They brought in banks for a bank day and promoted all of the features of direct deposit. In the final analysis, all but one person switched. Yes, there was bellyaching, but most people understood that it was not worth the ill relations to fight management on such an issue.  We haven’t had a complaint by anyone since. 

I know of two companies that have done this, one with 400 and the other with 800 employees. One was union and one was not.

(Anonymous)

Response:

We use Ceridian Self-Service, which allows employees to access their pay stubs over the Internet, as well as change their home address, update their federal W-4s, and calculate "what ifs" on payroll changes. We went through a three- or four-month transition period, setting up access passwords and providing some training, and then we stopped issuing paper copies.

To discourage employees from opting for paper, we mail live checks on the payroll day (end of day) via U.S. mail. Delivery usually takes three to five business days. To encourage direct deposit, we continually request that those who are not on direct deposit move to direct deposit, indicating the advantages, of course. Unfortunately, we cannot "force" someone to move to direct deposit.

(Anonymous)

Response:

We have been using a payroll service for years (Paylocity) and require all employees to have direct deposit of wages. We do not issue paper check stubs. The payroll accountant sends out a mass e-mail each pay period reminding people that they can access their pay information online. The e-mail includes instructions and the company code. Using a personal password, employees can access the prior period’s wage statements as well as W-2s. Obviously, employees do not find it necessary to go to the Web site each pay period if the net pay has not changed. I personally find it very easy to access the pay information on an as-needed basis.

I have been told that many employees have never accessed the Web site for the details of their pay. (These are probably the same ones who would never look at their paper stubs.) We give our new employees no choice but direct deposit of their net pay and have gotten no complaints.

Marge Tomasik (mtomasik@opportunity.org )

Response:

ADP offers online statements, including a history of past statements. As far as converting dinosaurs – we require it.

Bob McCarthy (bmccarthy@tripwire.com)