BILL ANALYSIS
SB 37
Page 1
Date of Hearing: July 8, 2009
ASSEMBLY COMMITTEE ON PUBLIC EMPLOYEES, RETIREMENT AND SOCIAL
SECURITY
Ed Hernandez, Chair
SB 37 (Strickland) - As Amended: June 25, 2009
SENATE VOTE : 36-0
SUBJECT : State employees: statement of deductions.
SUMMARY : Requires that state employees participating in the
direct deposit program receive their statement of earnings and
deductions by an electronic method unless the employee requests,
in writing, to receive a paper version of the statement.
EXISTING LAW :
1)Permits state employees of the state to voluntarily authorize
the direct deposit by electronic fund transfer of their salary
or wages into an account at the financial institution of their
choice.
2)Allows each employing agency to establish the participation
eligibility criteria.
3)Provides that participants enrolled in the direct deposit
program do not receive payroll warrants, but continue to
receive a statement of earnings and deductions (participants
receive a non-negotiable paper direct deposit advice).
4)Requires each state agency that issues a payment of salary or
wages, whether by direct deposit or otherwise, to provide each
employee, at his or her discretion, an itemized statement in
writing or electronically.
5)Provides that the electronic statement is contingent upon the
funding and implementation of the State Controller's Office
(SCO's) new 21st Century Human Resources system.
FISCAL EFFECT : Unknown.
COMMENTS : In his support letter on this bill, the State
Controller writes, The State Controller writes that this bill,
"?would allow state employees who participate in the direct
SB 37
Page 2
deposit program to receive their itemized earnings statements
electronically when the State Controller's Office has developed
the capability. These employees will also have the ability to
continue to receive earning statements on paper if they choose
to do so. Existing law mandates that the State provides each
employee an itemized statement of wages and deductions. This
law will provide greater support for moving employees to an
electronic statement. If every direct deposit participant
elected to receive electronic earnings statements, the
Controller's Office could realize an estimated annual savings in
excess of $162,000, while the State could save as much as $3.7
million annually. We believe it is good business practice to
use e-commerce tools wherever and whenever possible to meet the
goals of more efficient and cost-effective services. This is
especially important when cost savings are crucial to the State.
SB 37 will help achieve those goals and I look forward to
working with you to ensure its enactment."
Other supporters state, "SB 37 establishes a default system
whereby state employees who participate in a direct deposit
program will electronically receive their statement of earnings
unless they choose to receive paper copies. Paper production
contributes to global warming, pollution, forest depletion, and
water and energy consumption. By substituting electronic pay
stubs for paper pay stubs, this bill will save money and
conserve vital ecological resources."
Opponents state, "In our opinion, the current method is working
just fine. There are many reasons that an employee may wish to
receive a hard copy of their statement as opposed to an
electronic version. It seems to us the current opt in version
as it pertains to receiving the statement electronically is
sufficient and the responsibility should remain with the
employer should they want employees to receive them
electronically."
Similar legislation is AB 232 (Hill) which passed out of this
Committee earlier this year on a 6 - 0 vote and is currently
awaiting action in the Senate. AB 232 allows the California
State Teachers' Retirement System to prescribe the form for
accepting electronically signed applications and documents and
not mail a copy of benefit payment information when payments are
made by electronic funds transfer, unless there is a change in
the net amount paid.
SB 37
Page 3
REGISTERED SUPPORT / OPPOSITION :
Support
California State Controller's Office
City of Carpinteria
Contra Costa Taxpayers Association
Howard Jarvis Taxpayers Association
National Tax Limitation Committee
Natural Resources Defense Council
People's Advocate, Inc.
Santa Barbara County Taxpayers Association
Santa Barbara Technology and Industry Association
Sierra Club California
Opposition
California Association of Professional Scientists
Analysis Prepared by : Karon Green / P.E., R. & S.S. / (916)
319-3957