OMB believes more than $1M in savings possible if state switches to paperless payroll

TRENTON – The state  could save more than $1 million a year if it switched to electronic payroll, according to an audit recommendation from the Office of Management and Budget.

As part of the growing national trend of going “green’’ in regards to payroll, the OMB recommended that the Treasury could save $500,000 if payroll checks and stubs were eliminated in favor of an electronic transaction.

In addition, $600,000 could be saved if the system were extended to certain non-payroll checks, according to the audit.

The Treasury annually processes 7.6 million checks and other remittances, with the total cost of printing and postage for 2010 approximately $3.7 million, OMB stated.

OMB reported, for example, that it processes 80,000 payroll checks on a bi-weekly basis, with employees given the option of a paperless payroll system, including  receiving pay stub information on the internet, and that about 31 percent of workers receiving direct deposit participate in this program.

In a response to the recommendations, Treasurer Andrew Sidamon-Eristoff agreed substantial cost savings could be achieved, stated legislation would be required to mandate direct deposit, and said a bill, A3503, was introduced last November toward that goal.

That bill’s primary sponsor is Assemblywoman Connie Wagner, (D-38), Paramus, and the proposal was referred to the State Government Committee.

This bill would require that “the State Treasurer directly deposit net pay for all public employees of the State into an account in a banking institution designated by the employee, commencing Jan. 1 following the bill’s enactment. This requirement will also apply to State entities that do not use the centralized payroll system, including public institutions of higher education. The bill makes the same requirement for all county and municipal government employees.”

OMB believes more than $1M in savings possible if state switches to paperless payroll