Panel Passes Direct Deposit Initiative

TRENTON — The Senate Budget and Appropriations Committee today passed state Sen. Steven Oroho’s measure to require direct deposit for all state employee compensation and encourage local governments and school systems to require direct deposit.

“This common-sense initiative should be enacted across the state to save New Jersey taxpayers millions of dollars in unnecessary costs,” said Oroho (R-Sussex, Warren and Morris).

Oroho’s S-2090 makes direct deposit mandatory for all state employees, for compensation paid on and after July 1, 2014, and it permits local entities to require the same. It also provides that public employers must make any information concerning net pay, accompanying information and W-2 forms available to employees only via the internet. The Office of Legislative services has projected this modification will yield an annual savings of around $250,000 for state government alone.

Under current law, state employees, as well as employees of a county or municipality that has chosen to offer the option, may designate in writing a specific banking institution and a checking account, savings account, or share account for receipt of direct deposit of the employee’s net pay.

“Many residents probably assume that government would have already enacted such a commonplace business practice,” Oroho concluded. “In this day and age, government must account for every dollar and this is a simple way to save costs.”

S-2090 has been passed by the full Assembly and now heads to the full Senate for consideration.

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