Cutting back on paper costs

When the first personal computer was created, publicists of the 1960s envisioned a ‘paperless office,’ or an office of the future, in which all records would be electronic. No filing cabinets, no memos, no forms and no paper checks.

In reality, the PC has doubled the use of office paper in the last 20 years, because printing is now cheaper than ever, according to an Oct. 9 article in The Economist. But more recently, paper use is starting to decline because of innovations like the ‘paperless’ paycheck.

Half of students employed by Boston University are enrolled in direct deposit, allowing for their paychecks to be put straight into their bank accounts, according to Mary Ann French, director of the Student Payroll Office. Currently, check stubs containing pay advice are printed every week to correspond with these direct payments.

French said that if students have not picked up their pay stubs for more than six weeks, departments should mail the stubs to the employee. Some departments return unclaimed stubs to the Student Payroll Office.

State offices across the nation are already using technology to eliminate wasteful check stubs like those printed for direct deposit users, according to PaperlessPay.org. The website defines paperless pay as ‘eliminating paperwork in every phase of the payroll process, reducing costs and delivering faster, more convenient employee service.’

PaperlessPay.org categorizes Massachusetts as an ‘Opt-out State’ in which agency employees must give consent to receive online pay advice, as opposed to states such as New York or New Jersey that do not require employee consent.

BU said it is ‘looking into’ the option of opting-out of check stubs and receiving pay information online.’

BU Comptroller Steve Singer said the Student Link and Employee Link currently allows students, faculty and staff to view basic pay information online, but the software does not have capabilities for opting-out. He said the Payroll Office is trying to develop technology that would allow employees to choose not to have their pay stubs printed.

‘It’s a matter of getting appropriate resources,’ Singer said. ‘We’ve been talking about it for awhile. It’s just to say which way is the appropriate way to go.’

Overall, more than 80 percent of BU employees, including students, use direct deposit. Some departments have as high as 95 percent using direct payment, according to Singer.

Singer said the BU Payroll Office aims to reduce paper use in areas other than pay advice. Payroll introduced electronic student account payment last year to decrease the number of paper checks and mailing costs. The Payroll Office is also currently testing online billing with a small population of students who take classes on the Web.

MASS

SUPPRESSES STUBS

While state employees can choose to receive paper pay advice or to opt-out, Massachusetts is aiming to eliminate paper stubs and fully utilize an online application, PayInfo, for employees to receive all pay advice, Comptroller of the Commonwealth Martin Benison said.

The option to decline paper pay stubs was added to PayInfo last spring, and the number of employees suppressing their pay stubs has since increased from 5,000 to 18,000 out of 70,000 employees, Benison said. Among those involved are the University of Massachusetts campuses.

The Comptroller Office is promoting the initiative with advertising campaigns and reward programs, such as random drawings, to make employees more comfortable with the idea before mandating paperless pay, Benison said. Problems include how to provide access to online pay advice for employees who do not have a computer and Internet access at home.

‘Some employees are very happy to get [online advice], like state police officers and correction officers,’ Benison said. ‘They are not always at work on payday, and it’s actually an advantage because now they can get it whenever they want.’

The comptroller’s website states that eliminating state-printed pay advices saves 240 trees per year, reduces carbon dioxide emissions by 25,000 pounds and eliminates a cost of $2 million.

‘We think this is a win-win situation,’ Benison said. ‘It’s better customer service to employees, it saves the commonwealth money . . . it’s easier for everybody.’

Daniel Miguel, payroll director for the Department of Conservation and Recreation, said 15 percent of the department’s employees have signed up for paperless pay through PayInfo. The department’s goal is to go 100 percent paperless, following the example set by the comptroller’s office.

‘Since we are an environmental agency, we’ve been trying to push it and trying to sell it to our employees,’ Miguel said. ‘It’s a very good program because we save a lot of money on checks.’

Miguel said the department promotes opting-out with notifications that appear when employees log into the computer system. However, some of the department’s employees, such as those working in labor yards, do not have access to a computer.

Many other state departments have started this initiative, and those that have gone completely paperless have a less complicated labor profile, and every employee has computer access, Miguel said.

PROMOTING

PAPERLESS PAY

In addition to government efforts to reduce paper costs, private businesses and associations are also developing new ways to distribute paychecks.

Tufts University faculty and staff have been able to opt-out of pay stubs for three years through a self-service software called eServe, and the school’s Human Resource Services office is currently working to integrate students into the program, Edna Gilreath, Tufts associate director of HR, said.

Gilreath said Tufts encourages employees to opt-out to avoid security risks. Before pay advice was available online, the printed stubs often disappeared or were delivered to the wrong department.

‘As far as security, it’s much, much better,’ she said. ‘The cost of paper checks and direct deposit is huge, and it saves on man hours. It used to take four hours to print out all direct deposit [stubs] and checks for a payroll. Now it takes 20 minutes.’

Employees can check a box on eServe to decline the printed pay stubs, and they can also view and print out pay advice from the service.

Students cannot use eServe yet because Tufts needs to develop a secure password system for students, Gilreath said. Tufts payroll will ‘attack’ the student component to opting-out after upgrading to People Soft 9 software.

TALX is a provider of HR and Web payroll services, such as ePayroll and The Work Number, that focus on methods like paperless pay to reduce costs and increase conveniences for employers. Its clients include major retailers, schools, hospitals and Fortune 500 Companies, according to the TALX website.

A 2002 TALX case study on American Greetings reports that the card company converted to paperless payroll with ePayroll because of expensive, labor intensive methods of processing and distributing printed pay advice. American Greetings now saves $20 per employee that uses direct deposit each year, and the company employs more than 28,000 people in the field, according to the TALX report.

The American Payroll Association, a professional organization for payroll managers, advocates for paperless payroll because is saves from $1.22 to $2.50 per paycheck, Robert Wagner, director of communications, said. Electronic payroll also saves gas from driving to and from the bank and saves time the employees might spend on their lunch breaks waiting in line at the bank.

‘Employees generally like it, even employees hesitant to try direct deposit,’ Wagner said. ‘Once they get used to having money automatically in their account, they don’t want to go back.’

APA conducted a National Payroll Week survey on Sept. 9, 2005 that included the question: ‘How would you feel if your company went to a ‘paperless payroll?” Of 29,955 responses, 30.6 percent of people said their company already uses it and they like it, 43.4 percent said they would like it, 9.2 percent said they would be unhappy about paperless payroll and 16.7 percent said it would not matter.

The APA uses literature to educate its 25,000 members about paperless pay. The organization makes suggestions such as how to convince skeptical employees that direct deposit will not lose their paycheck or intrude on their privacy. Some members include the head of payroll for Starbucks, Toyota America, ETNA Insurance and many schools for which the APA holds an annual conference, Wagner said.

BU is currently a member of the APA. Susan Janssen, BU payroll manger, joined in 1987 and attends APA conferences for payroll managers in higher education. Janssen said the conferences are more focused on informing members about payroll laws than promoting paperless pay.

‘They’re obviously advocating anything to make a payroll department’s job easier, and certainly paperless payroll would, but we’re not using them as a resource,’ Janssen said.

Janssen said she foresees a paperless payroll system developing at BU along with the BU Works Project, which is a large project to update software used throughout the university, including payroll accounts and the human resources system.

‘We’re very anxious to go in that direction,’ she said. ‘It’s a benefit to the university as a whole . . . also, it would mean more opportunities to protect the security of employees.’