Electronic pay statements growing in popularity

"Electronic pay statements are becoming the new standard method of delivery," says Julie Vincent, a product manager at Ceridian Canada, which provides a range of payroll and human resources solutions.

At ADP Canada, clients’ use of paper pay statements has gone down by three per cent per year every year since 2011, says Lino Gentile, director of product marketing.

"That is evidence that the adoption of self-service and online pay statements is definitely real and happening."

Payroll departments considering switching from printed to electronic pay statements should discuss their options with the information technology department or a payroll service or payroll software provider.

When getting started, an important issue to consider is whether to move any other employee interactions with payroll/HR to a self-service model or just do it for pay slips. Gentile says there are cost-saving advantages to expanding self-service beyond online pay statements to include options such as T4s, address changes, changes to direct deposit account information and updates to employee dependant information.

"Organizations have done it successfully for pay statements only, but what we are finding is that if you broaden those processes, the case becomes much more lucrative when you think about diluting the support overhead and the rollout requirements," Gentile says.

He adds that it may also help encourage employees to buy-in to the change if they can access one system for a number of payroll and HR tasks.

Whether payroll implements electronic pay slips on their own or as part of a broader self-service package, the department must make sure the issuing of electronic pay statements complies with employment standards requirements and any collective agreements in place, says Vincent.

In most jurisdictions, employment standards legislation allows employers to provide employees with electronic pay statements as long as they meet certain conditions. In jurisdictions where the law is silent on the issue, payroll departments should check with the applicable employment standards board to get advice.

Jurisdictions that allow for electronic pay slips generally require employers to make sure that employees can securely and privately view the statement at work and can print a copy of it. For employees without computers at work, employers may have to set up kiosks for viewing and printing statements. With mobile technology, many systems now allow employees to view and print their statements from home, although that is not required by law.

Employers with Quebec payrolls have the added requirement of making sure they notify employees with each pay that they are getting an electronic statement, says Vincent.

"One kind of quirky thing about Quebec is they require a delivery notice, which is a little bit different than just saying every two weeks we’re going to post your statement up on a website somewhere and it’s up to you to go look at it."

She advises that payroll can meet this requirement by sending an email out every pay period to let employees know their statement is ready.

Employers that provide electronic pay slips must still follow all of the legislative requirements for how often they must issue pay statements, what information they must include on each statement and for how long they have to retain pay statement records.

Another issue to address when implementing electronic pay statements is privacy and security beyond what is required by law. Will employees be able to view their statements online, away from work? If so, it may be important to work with the information technology department to make sure secure protocols exist to protect data security.

Payroll must also decide whether it will require all employees to receive their pay statements electronically or whether they will have the option of sticking with paper statements. Some employers make it mandatory for all new hires while giving current employees the choice, says Vincent.

To encourage employees to go the electronic route, she says payroll could put the onus on employees to opt out.

"You don’t have to by default make them opt in. You can automatically enroll them and just give them an opt-out option. You have to act to opt out."

Another issue to consider is communication. "Having a plan and including communication in the plan is the biggest piece of all. And my theory around communication is always early and often," says Vincent. Payroll can use the company intranet, e-newsletters and inserts with pay slips, among other communication devices, to let employees know about the change and address any concerns they may have.

Vincent advises employers to also make sure they include training in the implementation plan.

"It’s a best practice to do the training. Certainly, in this day and age, most people can navigate a website and most of the e-statement delivery systems are very user-friendly, but as part of the communication plan, you absolutely have to provide some guidance. It doesn’t have to be a formal lunch-and-learn walk through, but there are training materials that should be provided."

Gentile suggests pilot testing the change before implementing it, especially if the employer plans to provide more than pay statements electronically.

"It is always very healthy to go out to a subset of employees, especially where it’s not a high-tech organization and there might be some reluctance to going online for this information. Select those you perceive as being comfortable with technology," he says.

"Roll out the online pay statements and self-service in general to those employees for a small portion of time. What you learn from that is the type of communication that you need to share with them, how much learning they really need and you also get a sense of what type of support you might have to deal with once you launch it to the broader organization."

Gentile adds that the pilot group can become a key resource for other employees. "As you roll it out to the broader base, those pilot employees can actually become your champion support. (Other employees may say,) ‘Maybe I’ll go and ask them where is the website and how do I register as opposed to calling payroll first.’"

He says another important element to success is to periodically remind employees that they have an e-statement option, especially if not all employees have signed up for it.

"Keep some attention on it. Just because you have announced it, it doesn’t mean (the employees) are going to retain it. They may have been very busy working on something at the time that announcement came in."

Gentile says some companies run contests to promote self-service options like e-statements.

"One of the favourites that I have heard of was that the first department to have every employee registered for self-service gets a pizza lunch," he says.

"Another organization gave away a vacation day. For everyone who registered before a certain date, you were put into a draw and were going to get a free vacation day. That type of thing puts some attention on it," he says.

"What we’ve seen is really quick adoption in a very short period of time. I think this organization with the vacation day was able to achieve 80 per cent employee registration within a couple of months."