What is
Direct Deposit?
Direct Deposit is a program that allows for the automatic
deposit of your net earnings in the financial institution
of your choice. |
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What are some
reasons for enrolling in Direct Deposit?
Direct Deposit of your payroll net offers several benefits
to participants, including:
- Fewer trips to your financial institution.
- Avoidance of long lines at your financial institution
on paydays.
- Convenient and consistent deposit of earnings in spite of business
absences, vacations or illness.
- Security in the knowledge that paychecks cannot be lost, stolen or
forged.
- Less risk or error due to a warrant lost or misdirected by your financial
institution.
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Will I
be eligible for Direct Deposit if I work out-of-state?
Yes. Payroll funds can be deposited in any financial institution within
the United States, as long as your institution is participating in the
program for automated deposits. Check with your financial institution
to find out if they will accept automated deposits.
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How does this differ from the Payroll Deduction Program
that is currently available?
The Direct Deposit program will allow you to have your entire net pay transferred to the
bank, credit union, or savings and loan of your choice. All payments, including regular
pay, shift differential, premium pay, and overtime, would be transferred through Direct
Deposit.
The payroll deduction program, on the other hand, allows you to deduct a set amount from
your regular payroll warrant (you may deduct all but $100). Other payments such as
adjustments, overtime, shift differential, or premium pays are not included in the payroll
deduction program and are paid through a paper warrant. In addition, payroll deductions can
only be made to a limited number of banks, credit unions, and savings and loans that have
agreements with the State Controller's Office.
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Will the State
Controller's Office continue to operate a Payroll Deduction Program?
Yes, some employees have payroll deductions established
for employee organization dues, credit union payment,
insurance programs, etc. The State
Controller's Office plans to continue this program.
The Direct Deposit program will deposit into your account
those funds available to you after all
of your payroll deductions have been applied.
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How do I sign
up for Direct Deposit?
Individuals wishing to enroll in the program must complete
a Standard (STD) 699, Direct Deposit Enrollment Authorization
Form. Once the form has been
completed, submit it to your personnel/payroll office.
The form is available on-line at www.sco.ca.gov/ppsd/empinfo/howto/
ddenroll.shtml.
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What happens
after I submit the Enrollment Form?
Your personnel/payroll office will verify your form for completeness and
any departmental eligibility requirements, then complete the remainder
of the form and send it to the State Controller's Office (SCO) for
processing. Once the SCO verifies that you have an active account at
your designated financial institution, all payments you receive
through the payroll system (e.g., regular pay, overtime, adjustments, travel
reimbursements through the CalAter system, etc.) will be made by Direct Deposit.
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What is the
bank routing number and account number requested
in the Enrollment?
These numbers are used to identify your financial institution
and account. It is important that this information be
accurate. If this information is
not accurate, it will increase the length of time to
enroll in the program, or funds could be routed to the
wrong account. We recommend that you verify
your bank routing and account numbers with your financial
institution before the Enrollment Authorization Form
is submitted. Instructions have also been
included on the reverse side of the form to assist you
in identifying these numbers.
Special note to Credit Union members: A number of credit unions in California
use a Depository Service company to process personal check transactions. The
routing number for this Depository Service is printed on your personal checks,
and is not the routing number for your local credit union. To enter your
correct routing number on the STD 699, be certain to contact your local credit
union first and obtain the appropriate routing number.
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After the State Controller's
Office receives my form, how long will it take for the change to occur?
Generally, if your form is received by the State Controller's
Office by the first of the month, your change will be
made by your next payday. This time
is necessary to verify that an active account exists
with your financial institution. Once this verification
has been completed, your next payment
will be issued through Direct Deposit.
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When will my Direct
Deposit Funds be posted to my account?
Funds will be posted to accounts in the following timeframes:
- Regular monthly or semi-monthly employees paid on the last day
of the pay period:
Your funds will be available to you on the first banking
day after the end of the pay period. For example,
if the pay period ends on Thursday, your funds should
be deposited and available on Friday.
If the pay period ends on Friday, a weekend, or a
holiday, your funds will be posted
to your account on the next available banking day.
For specific dates, please check our Web site at www.sco.ca.gov/ppsd/empinfo/payday/index.shtml.
- Positive pay employees (with lag between end of pay period and pay day):
Your funds will be posted to your account between the time the pay period ends and when
you are currently paid. Your funds should be available no later than the date you
would normally receive a warrant.
- Statutory Employees:
Your funds will be available to you on the first
banking day following the last calendar day of the
month. If the last calendar day of the month is on
Friday, a weekend, or a holiday, your funds will be
available on the next banking day.
- Supplemental Payments:
Supplemental payments (e.g., overtime, shift differential, premium pays, adjustments,
etc.) are available within two banking days of the issue date of the payments. If
the second day after the issue date is a weekend or holiday your funds would be posted
to your account the next available banking day.
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Why do some employees on
Direct Deposit have their money earlier than others?
Some institutions post funds to accounts at the beginning of the bank
business day, this is not a universal practice. Other institutions post
funds in the afternoon instead of the morning. Some institutions even post
funds prior to receiving the funds from the State as a customer service.
It is strongly recommended that you check with your financial institution to
determine when your funds will be available. If you are not satisfied with
their processing schedule, you may wish to consider using another financial
institution. |
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How will I know that my
payment has been sent to my financial institution?
You will continue to receive an earnings statement with a Direct Deposit
Advice. This document will inform you that the payment was sent to your
financial institution and will identify the Direct Deposit advice number
and Bank Transit routing number. |
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Why isn't my Direct Deposit
payment available the same day paper warrants are handed out?
The issue with posting dates is driven by the collision of a State regulation
and the nationwide system for Electronic Fund Transfer (Direct Deposit).
The great majority of employers have a payroll system
with a lag. Usually employees are paid every two weeks,
but with a one to two week lag from the
time they complete the work, until their payday. Our
pay system is one of the rare ones with, for most employees,
pay day equal to the last day of the
pay period. Here's where the problem comes in.
There is a long-standing State regulation that says employees should not be
given their pay until they have completed their work for the pay period (this
intuitively makes sense). This is why typically departments pass out warrants
in the afternoon on payday. Now we layer on the Direct Deposit program.
“Posting” date is when the banks get the money and also when
they are required to have it available to employees. Although it varies, most
financial institutions post early in the day on the posting date. When/if we
make the posting date the same as payday, the banks and employees have the
payments prior to the end of the pay period. Our general approach is to have
the posting date the day after payday. Sometimes this works fine, but the
Direct Deposit systems require that a “posting date” be a regular
banking day (these are defined by the Federal Reserve Board). They must be a
non-holiday weekday. As you can see, the delays come when payday is followed
by a weekend and/or a holiday.
For many employees the problem is solved because some financial institutions
choose to post the funds on payday as a service to their customers. (Essentially
fronting the money, providing an interest-free loan). |
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Can I have my payments deposited
to either my checking or savings accounts?
Yes. Either account is eligible. However, you must designate only one account
to receive your funds. If you want a portion of your payment deposited into
another account(s), you must make arrangements with your financial institution
for a transfer of funds. |
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Can I have my payments deposited
directly to my spouse's account?
No. The account to which your payment is deposited must carry your name. It
can be held on a joint basis, as long as your name is on the account.
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What if I later choose to
transfer my Direct Deposit to another account or financial institution?
To transfer your Direct Deposit, complete and submit a
new enrollment form. Generally, if your form is received
by the State Controller's Office by the first of the
month, your change will be made by your next payday.
Please note: It is extremely
important to leave your old account open until your first
payment is deposited into your new account.Once a
deposit is made to the new account, the old account can
be closed. If your old account is closed before you notify
the State Controller's Office of the change, the payment
will be rejected by the financial institution and
a payroll warrant will not be issued until the payment
returns to the Controller's Office. |
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What happens if a payment is rejected by my financial
institution due to a problem with the account?
If a payment is rejected by your financial institution
due to an invalid account number, the State Controller's
Office will notify your personnel/payroll office, take
you off
of Direct Deposit, and issue a payroll warrant. The
payroll warrant will be issued three to five working
days after the State Controller's Office receives the
returned
payment from your financial institution. |
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If a person is on Direct Deposit and wants to change financial
institutions, how long shoud they keep their old account open?
To re-designate or change your account and/or financial insitution, complete a STD. 699
enrollment form as a change and submit it with your new information. You should keep
your old account open until your first payment is deposited into your new account.
Generally, if your form is received by the State Controller's Office by the first of the month,
your change will be made by your next payday.
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What happens if a person had Direct Deposit and closed
their account, but didn't cancel Direct Deposit?
The financial institution will return the money to the SCO within 5 to 7
days as account closed. SCO will cancel the direct deposit account, redeposit the payment
and contact the employee's personnel office to either re-key the pay or telling them that
SCO will re-issue the pay. Whenever an account is closed, the employee should contact
either their employer or SCO immediately to cancel their direct deposit enrollment.
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What happens if I am overpaid
through Direct Deposit?
If you receive an overpayment through Direct Deposit, the State has the
option of either recovering the funds directly from the account you
designated for Direct Deposit or recovering the funds from future salary
payments. If the State chooses to recover the overpayment from future
salary warrants, it may be necessary to remove you from Direct Deposit.
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What if my salary or payroll deductions change?
Your earnings statement will indicate the change in your
gross salary or deductions and the new net salary will
continue to be sent to your financial institution without
interruption.
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Am I the only one who can cancel my Direct Deposit
Authorization?
No. The State may remove you from Direct Deposit under the following conditions:
- You no longer meet a departmental eligibility requirement (some departments require
a minimum leave balance); or
- Your Direct Deposit payment is returned (e.g., due to a closed account or invalid
routing number); or
- You have requested a disability benefit; or
- It is necessary to recover/prevent overpayments.
Your agency or campus will notify you, if you are removed from the program.
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Whom do I contact if I have
any questions about Direct Deposit?
Contact your financial institution with questions concerning their handling
of direct deposit payments. If you have questions on Direct Deposit enrollment,
eligibility, or how the program will affect you, contact your personnel/payroll
office.
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