The Office of Management and Budget announced on Monday that the National Finance Center, which processes payroll for 675,000 federal employees, will begin issuing electronic pay stubs as a default. Employees will be able to opt for paper statements, but they will have to make an active choice to do so.
The Homeland Security Department will be the first to make the transition, and it should take place within a few weeks, OMB spokeswoman Jean Weinberg said. The Agriculture, Housing and Urban Development, Justice, Labor, Treasury, and Veterans Affairs departments and the Small Business Administration will follow, according to Weinberg. OMB is encouraging them to move quickly on the new system, she added.
The Obama administration estimates the initiative -- suggested by federal employees as part of a cost-cutting contest -- will save $4 million annually. A spokesman for the American Federation of Government Employees was supportive, but cautioned all employees should have access to the statements.
"We do have concerns about employees who don't have access to computers and we need to make sure that the concerns of those employees are properly addressed," the spokesman said. "DHS has committed to negotiate these procedures before implementation and we expect other agencies to do so as well."
The National Finance Center has the lowest percentage of electronic pay stubs of the federal payroll facilities, at 30 percent. In response to an OMB inquiry, the Defense Finance and Accounting System said 77 percent of the 908,930 employees it serves get electronic statements, and the National Business Center sends electronic statements to 83 percent of its 199,556 employees. The General Services Administration sends the 27,000 employees on its payroll list electronic statements instead of paper.
OMB Director Peter R. Orszag said in a December 2009 memorandum that the agency would work with all payroll processing centers to make electronic statements the default, and to find appropriate mechanisms to allow employees to opt out if they prefer paper statements.
International Federation of Professional and Technical Engineers Legislative Director Matt Biggs seconded AFGE's concerns about employees who do not have regular computer access, but praised OMB for the spirit of the initiative.
"It is the right move to make," he said. "Not only would transitioning to electronic pay stubs be both cost-effective and reduce the government's carbon footprint… it will also prove to be much more convenient for federal workers."