New Jersey-2012-A565-Introduced

An Act concerning use of direct deposit and Internet for public employee compensation and retirement payments, amending P.L.1981, c.385 and P.L.1987, c.38, and supplementing P.L.1987, c.38 and Title 43 of the Revised Statutes.

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. Section 1 of P.L.1981, c.385 (C.52:14-15a) is amended to read as follows:

1. Whenever any person holding public office, position or employment, whose compensation is paid by this State or by any board, body, agency, authority or commission thereof, hereinafter referred to as "employee" , shall indicate in writing to the proper disbursing officer his desire to have his net pay deposited in a specific banking institution in a designated checking account, savings account, or share account for such employee, the State Treasurer shall make the deposit in the respective banking institution on behalf of the employee.

Commencing on January 1st following the enactment of P.L. , c. (pending before the Legislature as this bill), the State Treasurer shall have net pay for all employees directly deposited in a specific banking institution as designated pursuant to this section. The State Treasurer shall make available for such employees all information concerning net pay, and any accompanying information approved for distribution with net pay, only on the Internet with restricted access and policies and procedures to protect the integrity and confidentiality of the information. The provisions of this paragraph shall also be applicable to all State entities that do not utilize the State centralized payroll system, including public institutions of higher education.

(cf: P.L.1981, c.385, s.1)

2. Section 2 of P.L.1987, c.38 (C.52:14-15f) is amended to read as follows:

2. Upon the adoption of an ordinance or resolution, as appropriate, the governing body of a county or municipality may provide for the deposit of the net pay of any employee of the county or municipality, or of a board, commission, bureau, department, or other public agency thereof, in a specific banking institution in a designated checking account, savings account, or share account. When the employee shall indicate in writing to the proper disbursing officer his or her desire to have his or her net pay deposited, the disbursing officer shall make the deposit in the respective banking institution on behalf of the employee. As used in P.L.1981, c.385, "employee" shall also mean any person holding public office, position, or employment whose compensation is paid by a county or municipality or any board, commission, bureau, department, or other public agency thereof.

Commencing on January 1st following the enactment of P.L. , c. (pending before the Legislature as this bill), the governing body of a county or municipality shall have net pay for all employees directly deposited in a specific banking institution as designated pursuant to this section. The governing body shall make available for such employees all information concerning net pay and any accompanying information approved for distribution with net pay, only on the Internet with restricted access and policies and procedures to protect the integrity and confidentiality of the information.

(cf: P.L.1987, c.38, s.2)

3. (New section) Commencing on January 1st following the enactment of P.L. , c. (pending before the Legislature as this bill), the board of education of every local school district shall have net pay for all employees directly deposited in a specific banking institution in a checking account, savings account, or share account designated in writing by the employee. The board shall make available for such employees all information concerning net pay, and any accompanying information approved for distribution with net pay, only on the Internet with restricted access and policies and procedures to protect the integrity and confidentiality of the information. As used in this section, "local school district" shall have the meaning set forth in section 3 of P.L.1991, c.393 (C.18A:12-23).

4. (New section) Commencing on January 1st following the enactment of P.L. , c. (pending before the Legislature as this bill) for all public employees who retire on or after such date, all recurring payments due and payable from State and locally-administered retirement systems shall be directly deposited in a specific banking institution in a checking account, savings account, or share account designated in writing by the payment recipient. The retirement systems shall make available to such recipients all payment information, and any accompanying information approved for distribution with the payments, only on the Internet with restricted access and policies and procedures to protect the integrity and confidentiality of the information.

5. This act shall take effect immediately.

STATEMENT

This bill requires 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 January 1st 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.

Currently, public employees have the option to designate in writing a specific banking institution and a checking account, savings account, or share account for receipt of the direct deposit. Commencing on January 1st following enactment of the bill, this option will be eliminated and direct deposit will be mandatory. In addition, all information concerning net pay and any accompanying information will be available to the employee only on the Internet with restricted access to protect the integrity and confidentiality of the information.

The bill also mandates that the boards of education for every school district have net pay for all employees directly deposited, in the manner described above, and accompanying information made available to the employee only on the Internet in a similar manner as required for State and local employees.

Finally, the bill mandates that all recurring payments from State and locally administered retirement systems for public employees who retire on or after January 1st following the enactment of the bill be directly deposited for all recipients into a specific banking institution in a checking account, savings account, or share account designated in writing by the recipient, and that all information concerning net retirement payments be made available to the recipient only on the Internet in the same manner as for public employees.