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Date: May 28, 2008
Bulletin Number: 822
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Subject

Direct Deposit Enrollments

Purpose

To encourage agencies to promote direct deposit for their employees and to outline OSC guidelines for the direct deposit program.

Affected Employees

All employees.

Effective Date(s)

Immediately.

Background

Regulations governing the Direct Deposit program are provided in Chapter IV, Part 102 of the Official Compilation of Codes, Rules and Regulations of the State of New York.

OSC Direction

Direct deposit is the preferred method for paying State employees and benefits both New York State and the employees.  OSC encourages agencies to promote full direct deposit for employees who currently receive a paycheck and/or a direct deposit advice.  Direct deposit is cost effective, safe and secure.

Minimizing the Risk of Unrecoverable Overpayments

All employees should be offered the opportunity to participate in direct deposit unless the employees have demonstrated specific behavior that may result in unrecoverable overpayments.

To minimize the risk of unrecoverable overpayments, OSC offers the following guidelines for use by agencies:

  • An agency may restrict direct deposit enrollments or cancel an employee’s enrollment in direct deposit if there is a high risk of an unrecoverable overpayment. A risk of an unrecoverable overpayment may exist when an employee has a pattern of unauthorized absences or absences without accruals.
  • New employees are not considered a risk and should be encouraged to enroll in direct deposit when hired.
  • Employees returning from LWOP should be allowed to enroll in direct deposit without accumulating time accruals, unless there was a pattern of time abuse prior to the leave.
  • Whenever possible, agencies should recover overpayments transmitted through direct deposit from a subsequent payroll instead of canceling an employee’s direct deposit or requesting a recovery of direct deposit funds from OSC.
Agency Actions to Promote Direct Deposit

Agencies should review their current direct deposit enrollment and cancellation policies and practices to ensure there is an appropriate balance between promoting direct deposit and protecting New York State assets.  The need for internal controls should not result in unnecessarily discouraging or restricting participation in direct deposit.  OSC discourages the following:

  • Not offering direct deposit to new employees at the time of hire.
  • Canceling an employee’s direct deposit because the employee did not pick up their direct deposit advice.
  • Requiring excessive levels of accrual balances to initially enroll and maintain enrollment.
  • Denying direct deposit for failure to submit travel reimbursements on time.

Promotion is the key to a successful direct deposit program.  When direct deposit is actively promoted, employee participation increases.  All agencies are encouraged to promote direct deposit.  The following actions may enhance direct deposit participation:

  • Emphasize that direct deposit is the preferred method for paying State employees.

    - Funds are electronically transferred to the employee’s account(s) at their designated financial institution and the funds are available on payday.

    - No need to go to the financial institution to deposit a paycheck.

    - No worries about lost or stolen paychecks.

  • Encourage new employees to enroll in direct deposit at the time of hire.  It is not necessary for a new employee to have a minimum level of accruals to be eligible to participate in direct deposit.
  • Distribute information to employees with paychecks periodically and ensure enrollment forms are readily accessible.
  • Promote direct deposit in agency newsletters and communications with employees at least twice a year.
Enrollments/Changes to Direct Deposit

The direct deposit form AC 2772 (Rev. 8/07) is available on the OSC website at https://www.osc.state.ny.us/payroll/files/ac2772.pdf. Agencies may contact OSC's Management Services by telephone at 518-474-3438 or by fax at 518-473-4560 to request a supply of the form.

Instructions for enrollment and/or changing direct deposit enrollments are printed on page two of the direct deposit form.  The direct deposit form is a legal document and cannot be altered by the agency, employee or financial institution.

If an employee has more than one account, the accounts should be entered on the form and into PayServ in priority order.  Funds will be deposited to the accounts in the order listed.

The form provides instructions on the appropriate action to take if the employee needs to change direct deposit account information.  Employees should not close current accounts until they receive confirmation of the requested action in their paycheck or direct deposit advice.

The completed form should be submitted to the employee’s agency Human Resources or Payroll office, not to OSC.

Employee Movement Between Payrolls

Direct deposit data on the employee’s PayServ record should be verified for all rehires, concurrent hires and transfers by the employee’s new agency.

Questions

Questions regarding this bulletin may be directed to the Payroll Deductions mailbox.