Payroll Webinar: Going Paperless in Payroll

©2019 The Payroll Advisor
1
Going Paperless in
Payroll
Presented on Tuesday, August 6, 2019

Housekeeping
Questions Speaker
Today’s
topic

How to earn credit
Stay on the webinar,
online for the full 60
minutes
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Program codes delivered
by email, to registered
email, approximately 30
days following today’s
session

Our Focus For Today
 Updating and improving
your direct deposit
 Updating and Improving (or
establishing) your pay card
program
 Going electronic on your
timekeeping system
 Filing quarterly returns or
other required reports
electronically
 Making electronic
payments where available
for such items as child
support payments and tax
deposits
 Implementing e-IWO for
child support garnishments
 Implementing an electronic
portal for employee self-
service of Form W-4
 Distributing Forms W-2 to
employees electronically
for the initial copy
 Distributing all duplicate
Form W-2 requests
electronically
 Submission of request
forms (vacation requests,
address changes) to payroll
electronically where
possible
6

Updating, implementing and improving
your programs
Direct Deposit and Paycards
8

5 Steps to Improving Direct Deposit
9

Get Your House in Order First
10
Are your sign up forms bad?
Do you include directions and
samples?
Are the forms easy to access
and submit but still secure
Do you
explain
how
long the
process
will
take?

Survey Your Employees
11
Can be essay or check box style
Can be quick email or paper form
Helps narrow your marketing

Survey Your Employees
12
 Don’t waste time doing
all company e-mail
blasts
 Direct e-mail only the
employees who get
paper checks
 This is the time for
paycheck stuffers!

U.S. Treasury Survey
13
Came up with 4 main reasons why
they wanted a paper check
1. Money management
2. Sense of control
3. General Inertia: Haven’t gotten
around to it
4. Mechanical limitations: there is a
block to them having a bank
account

Create the Target Marketing
Materials
14
Create marketing
to target reasons
given in survey
Design marketing
to address
majority of needs
or concerns
Use materials
that will reach the
target audience
such as payroll
stuffers

Conduct the Campaign
15
Conduct the campaign on many fronts
And keep it going!

16
Live sign up
on site
Employees
like help
Banners and
signs
Employees
need to be
reminded
Create FAQs
Employees
need facts

17
Create a slogan—such as
“Lose Wait”
Hold webinars
and online
meetings
Get banks and
credit unions
to help sell it

18
Get testimonials
Direct
deposit is
great!
Have staff advertise when
distributing checks
Get balloons, coffee mugs or other
items to promote the campaign

Remember New Employees
19

New Employee Orientation
20
 Have someone from payroll attend to explain
the program plus complete and accept direct
deposit forms
 Need more than 2 minutes
 Do a slide presentation explaining the benefits
 Need time to answer questions and accept
forms
 Maybe a table at the back after your
presentation

New Employee Orientation
21
 May have to have more than one employee there
 Warn employees in advance that they need to bring
a voided check with them to sign up—HR should do
for you in the info packet for the orientation
 You can state these things but can’t force so state
forcefully
 Any new employee who did not sign up gets a
follow-up e-mail reminder prior to first paycheck

New Employees
22
 Special stuffing in paycheck for first payroll as a
reminder to sign up…I put in the form itself
 They go on your targeted marketing list if they fail to
sign up by the second payroll…don’t let them slide
 Focus some of the posters and displays around at
new employees specifically
 Post signs etc. in HR where new employees are
hired or interviewed

Rinse and Repeat…
23
 This is an ongoing marketing
campaign until there is 100%
participation of all employees
who are bankable
 No time limit
 May find trouble spots that you
can adjust your marketing
campaign as you go along

Trouble Spots
24
 Older employees can sometimes
be wary of electronic payments if
they are not used to it
 Try “identity theft” protection
 Remind them that they will have
direct deposit when they are on
social security—say nicely of
course!
 Cultural differences will be a
challenge
 After 2008—I hate banks
attitude!

Steps to Improving Pay Card
Program
25
Get house
in order
Survey
unbanked
employees
Create
target
marketing
Run the
campaign
New
employees
Using the same steps
Unbanked not undecided

Final Thoughts
26

Going electronic on your timekeeping
system
Timekeeping
27

Going Electronic with Timekeeping
28
According to the American Payroll
Association’s The Payroll Source:
“…as much as 1% to 3% of labor
costs are wasted on errors,
processing costs, faulty time
recording, and noncompliance
penalties…Time and Attendance
Automation can help control these
costs”

Benefits of an Electronic System
29
 Less time spent processing
 Fewer errors introduced during
processing
 Decreased costs
 Increased compliance with federal
and state wage and hour
regulations
 More efficient data for use by
management to control labor
costs

Making electronic payments and filing
quarterly returns or other required reports
electronically where available even if not
mandatory
Paying and Reporting Taxes
Electronically
30

Electronic Filing of Reports
31
 There are states that
require employers to
file quarterly reports
electronically but we
are discussing when
the state gives the
option to e-file or
paper file
 To cut down on paper
use always use the e-
file option even if not
mandatory

EFT to Save Time and Paper
32
 Many states have mandatory filing and paying by
EFT—California for example
Go Green—do all deposits via EFT regardless if
required by the state—just as done for federal
taxes

Implementing e-IWO for child support
garnishments and paying using EFT
Child Support
33

E-IWO for Child Support
34
 Office of Child Support
Enforcement working with
employers and states to
automate the income withholding
process with electronic income
withholding orders or e-IWO
 2 types of implementation
options

E-IWO Options
 Medium to large employer who has IT
resources that can commit several
months to programming
 IWOs sent in flat file format or .XML
document
 You process and make appropriate
updates to payroll system
 Get PDF of IWO
 You create acknowledgement record
whether accepting or rejecting
 Takes 3-5 months to implement
 Receive small number of IWOs or
have no IT resources
 Receive an image ready PDF copy
of the IWO and a prefilled
acknowledgment as an excel
spreadsheet or PDF
 Takes 2-4 weeks to implement
 Need to configure server and
directories so some IT support is still
needed
36
Option 1—System to System
Option 2—No Programing Option
(NPO)

37
PDF
Acknowledgement
Sample

Want a Single Acknowledgement
Entry Form?
38
 XLS is for you
 Receive a IWO PDF of each income withholding
order sent to you by a state and a single
spreadsheet for acknowledging
 Enter “accept” or “reject” for each row
 Supple a reason code if rejecting
 Save the file
 Move to outbound directory
 You are done

39
XLS Acknowledgment Sample

How to Enroll
40
 Must register by completing the e-IWO profile form
and providing FEINs
 Profile form includes:
 Agreement to exchange data
 Contact information
 Exchange preferences (system to system, PDF or
excel spreadsheet)
 File names
 Server info such as User ID, Password, IP Address,
Host Name, directory Name and Port

41
Map courtesy of the OCSE

How to Enroll
For more information on this program:
eiwomail@acf.hhs.gov
42

The Employer Can Also
43
 Notify a state when an
employee is terminated
 Notify a state when an
employee is going to receive a
lump sum payment
 Employer controls when the
notices are released

Lump Sum Payments
44
 If the child support enforcement agency
becomes aware that the noncustodial parent
is or may be entitled to a “lump-sum
payment” (bonus, severance pay, etc) a
separate lump sum transaction may be sent
to the employer in order to obtain part or all
of the payment to apply to the noncustodial
parent’s support obligations.
 The latest version of the child support
income withholding order allows for an
agency to request child support be withheld.
A “ONE TIME ORDER/NOTICE—LUMP
SUM PAYMENT” box is now available on the
order to handle these requests.

Lump Sum Payments
45
 The question for payroll departments is what
rules govern lump sum payments as
opposed to ongoing deductions.
 Do the same limits apply?
 Does the state have any special rules that
apply only to lump sum payments?
 The answer is…depends on the state
 However, DOL has issued opinion letter
 https://www.dol.gov/whd/opinion/CCPA/2018/
2018_04_12_1NA_CPPA.pdf

Lump Sum Payments
46
 The Opinion Letter addresses 18 specific types of
lump sum payments and identifies which ones qualify
as earnings subject to the 50 percent to 65 percent
withholding limits under the CCPA. Of the 18 types of
payments, only three do not qualify as earnings:
 Buybacks of company shares
 Workers’ compensation for medical reimbursement
 Wrongful termination insurance settlements for
compensatory or punitive damages
 The remaining 15 types of lump sum payments are
subject to the CCPA limitations on child support
withholdings.

To Help With Lump Sum Payment Questions
the OCSE Offers A Chart That Gives
47
 Definition of lump sum payments
 Requirements for reporting lump sum payments including
citation of state laws
 Threshold amounts for lump sums to be reported if any
 Length of time employers must hold the lump sum payment
 Whether or not the state uses the income withholding order
for lump sums
 CCPA limits that apply to lump sums
 https://ocsp.acf.hhs.gov/irg/irgpdf.pdf?geoType=OGP&group
Code=EMP&addrType=SLS&addrClassType=EMP

Lump Sum Reporting Process
49
Employer:
 Provide information about employees who are eligible to receive a lump
sum payment using one of these methods:
 Enter information about each employee into the fields on the Lump
Sum Reporting screen
 Upload a Microsoft Excel spreadsheet (or similar format) to report
many employees at one time
 After providing pending lump sum payment information, you will:
 Receive confirmation that the information was uploaded
 Be able to review errors if the information was not uploaded
 Correct the errors and resubmit files
 View information you reported in the last 60 calendar days

Lump Sum Reporting Process
50
OCSE Portal:
 Validate the file upload
 Notify the employer if there are file errors
 Re-validate the file once the employer resubmits it
 Compare information provided by the employer to individuals
who owe child support
 Generate notification to the state(s) about the pending lump
sum payment
 Provide details about information submitted by employers for
60 calendar days

Terminating Employees
53
 Upon termination, mail or fax a completed
"Termination Notification" form to the issuing agency,
OR some states will accept this information over the
telephone or online. The employer should have the
following information available:
 Employee's name,
 Employee's case identifier,
 Last known home address,
 New employer's address (if known), and
 Date of separation.

eTerm
54
 Electronic Termination (eTerm) allows employers to report
employee terminations online. Registered employers provide
information about employee terminations (or that an individual has
never worked for them) either by uploading a file or entering
information in the online eTerm application.
 How Employers Can Participate
 Employers currently registered with the Lump Sum Reporting
application on OCSE’s Child Support Services Portal are
automatically enrolled in eTerm.
 Employers who are not registered for the Lump Sum Reporting
application should contact the Employer Services Team at
employerserviceswebapp@acf.hhs.gov for a brief demonstration of
the application. Once the demonstration is completed, employers
can register to use both the eTerm and Lump Sum Reporting
applications by completing the Employer Services Agreement and
Profile form.

eTerm Process
55
Employer:
 Provides notification that the person is no longer or was never employed
by the employer
 Receives an acknowledgment indicating whether the file was
successfully uploaded to the Employer Services Web Application
 Views report files, which are available for download for 60 days.
eTerm Application:
 Generates notification of the termination to the state either through an e-
IWO file (if the state participates with e-IWO) or
 Sends an email notification of the termination to the appropriate state
child support agency.

59
Map courtesy of the OCSE

Paying by EFT
60
 Only 16 states require child support to be paid
electronically. These include: CA, FL, IL, IN, IA,
MA, NE, NV, ND, OH, OR, PA, TX, VA, and WV
 All state child support agencies except for South
Carolina accept payments by EFT/EDI (electronic
funds transfer/electronic data interchange)—SC is
now on board and is gearing up
 EDI includes the identifying information such as
case number to properly apply the payment

MT
WY
ID
WA
OR
NV
UT
CA
AZ
ND
SD
NE
CO
NM
TX
OK
KS
AR
LA
MO
IA
MN
WI
IL IN
KY
TN
MS AL GA
FL
SC
NC
VA
WV
OH
MI
NY
PA
MD
DE
NJ
CT
RI
MA
ME
VT
NH
AK
HI
Requires EFT
Offers EFT but does not require
Does not offer EFT
EFT Requirements
61

Implementing an electronic portal for
employee self-service of Form W-4
Form W-4
62

Electronic Form W-4
63
 May establish system that
allows employees to submit
their initial form or change
existing form electronically
 Paper form must be available
as well
 Paper form can be required
for some employees if
business reason justifies
 Must be able to provide
questionable forms to IRS
electronically

Tech Specs for Electronic Forms
64
 Electronic version must contain
exact same info as the paper
version-no exceptions
 Must be PIN or verified system
 Lock-in letter compliance must
be available
 Perjury statement must be there
 Employees must understand
that it is signed under penalty of
perjury just like the paper form

Tech Spec Continued
65
 Electronic signature required
 Must be able to print hard copy
 All other regulations apply the same as paper form
 Practical Point: Good to have a system that
requires employee to acknowledge perjury
statement in order to submit as a separate step

Distributing Forms W-2 to employees
electronically for the initial copy and for
duplicates
Form W-2
66

Electronic Forms W-2 to Employees
67
 Software or website specs will vary
 Employee must consent—electronic consent even if
consenting on paper
 Big stumbling block is disclosure requirements
 Statement can be furnished on the web if employee
given access info
 See link section – IRS code

Disclosure Requirements
68
 May get paper if they want it
 How long will the consent last
 Procedure for paper copy after giving consent
 How to withdraw consent and how it is confirmed
 Conditions on when electronic Form W-2 is not
available
 Procedures for updating contact info for employee
 Employer must notify if changes in contact info for
employer

Disclosure Example from Yale
69
• If an employee does not consent to receive an electronic version of Form W-2, he
or she will be furnished a Form W-2 on paper.
• The 2012 Electronic Form W-2 Consent Statement is effective for Forms W-2
issued for the calendar year 2012 and all future periods until consent is withdrawn
or the individual is no longer employed by the University.
• After giving consent, an employee may still request a paper Form W-2 by contacting
the Payroll office in writing. This may be done via email to:
payroll.taxforms@yale.edu or U.S. mail to: Payroll Department Attn: Tax Form
Request, Yale University, P.O. Box 208356, New Haven, CT 06520-8356. The
request for a paper W-2 will not terminate consent.
• An employee may withdraw his or her consent with 30 days' notice by sending a
written confirmation of the withdrawal and its effective date. This may be done via
email to: payroll.taxforms@yale.edu or U.S. mail to: Payroll Department Attn:
Consent Request, Yale University, PO Box 208356, New Haven, CT 06520-8356.
The withdrawal of consent does not apply to a Form W-2 that was furnished
electronically before the withdrawal of consent is furnished. Upon receipt of the
withdrawal, the University Payroll Department will send a written confirmation of the
withdrawal via U.S. mail or email.

Disclosure Example from Yale
70
• The University will not provide the Form W-2 electronically to an individual who has terminated
his or her employment with the University prior to 1/1/2013. These individuals will receive
paper copies via U.S. mail. Only active University employees will have access to the electronic
version of Form W-2. If a former employee requires an additional copy of the Form W-2, he or
she may follow the aforementioned methods of contacting the University Payroll Department.
• If an employee has consented to receive an electronic version of Form W-2 and has not printed
the form prior to termination, he or she should contact the University Payroll Department in
order to receive a paper copy via U.S. mail.
• An employee must contact Yale University Payroll Department immediately with any updated
contact information (e.g. email address, mailing address, etc). This may be done via email to
payroll.taxforms@yale.edu or U.S. mail to: Payroll Department Attn: Tax Form Request, Yale
University, P.O. Box 208356, New Haven, CT 06520-8356.
• The hardware and software requirements needed to access, print and retain Form W-2
electronically include an internet connection, web browser, and Adobe Acrobat reader.
• The electronic version of Form W-2 will be available on the web site for at least 3 years from its
original posting date.
• The Form W-2 may be required to be printed and attached to a federal, state, or local income
tax return.

Duplicate Form W-2
71
 Nothing in the regulations require a duplicate
form to be on paper
 No disclosure required for duplicate forms
 May require employee to download—should
furnish printer and computer to use just in case
 Employers are not prohibited from charging a fee
for the issuance of duplicate Form W-2 per IRS
Code—charge for paper not for electronic?

Submission of request forms (vacation
requests, address changes) to payroll
electronically where possible
And Finally Internally
72

Going Paperless Internally
73

What about Paystubs?
74
 40 states have some type of
requirement for paystubs or pay
statements
 Paper or electronic-7 states have
enacted legislation permitted
electronic 1 has issued statement
 DE, HI, IA, ME, MN, NC, OK,
and OR
 CA, NM, NY & VT employee
must agree to it

Websites
75
 If you have one they
must be up-to-date
 If you don’t have one—
get one if possible
 PDF files of all forms,
links to IRS or state info
 FAQs and all policies
 Examples

Questions
76

77
How Ascentis
can help
Payroll HR &
Benefits
Talent
Management
Recruiting &
Onboarding
Time &
Attendance
›Paystubs available
on the web and on
mobile app
›Electronic W-2
›Direct Deposit
›Tax Settings

Learn more
Learn more about how Ascentis can help your Payroll needs

How to earn credit
Stay on the webinar,
online for the full 60
minutes
Be watching using your
unique URL
Program codes
delivered by email, to
registered email,
approximately 30 days
following today’s
session

Contact Us
webinars@ascentis.com
www.ascentis.com
800.229.2713

Payroll Webinar: Going Paperless in Payroll

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