Cost savings, timeliness among the advantages
Despite the fact we live in a technology-driven world, less than one-third (29 per cent) of employers offer electronic pay statements to employees, according to a survey of 2,766 employees in August by the Canadian Payroll Association (CPA).
“Electronic brings a lot of efficiencies to the employer,” said Steven Van Alstine, vice-president of education at the CPA. “There are no distribution issues, no couriers fees, not a lot of paper being used and no concerns surrounding timeliness.”
Twenty-three per cent of survey respondents said having electronic statements would be easier for them, 27 per cent said they would be fine with them and 24 per cent said their employers offered it and they liked it. That means nearly three-quarters (74 per cent) of respondents are interested in receiving electronic pay statements, according to the CPA?study.
Why employers are reluctant
Even though employees seem to be interested, employers may be hesitant to make the switch due to concerns about meeting legislative requirements, said Bill Smyth, president of payroll services provider OnPayroll.ca. However, all jurisdictions allow electronic statements as long as access to print and confidentiality exists, according to the CPA.
Yukon also requires employers to apply for the use of electronic statements through labour standards. Quebec legislates case by case determination may be required in order to establish the delivery method of pay statements, according to the CPA.
“Another concern is the newness of the concept,” said Smyth. “It does take some significant programming to be able to produce electronic pay advices and they may not have the software to do it or their service provider may not offer it.”
The major benefit to switching is cost savings in terms of requiring less paper, less manpower and less courier costs, said Van Alstine.
HBC?goes paperless, saves 30 per cent
Toronto-based Hudson’s Bay Company (HBC) decided to make the switch on Jan. 1, 2010, due to the size of the company and the spread of employees all across the country, said Roula Panopoulos, communications manager at HBC. With 500 stores across Canada and 50,000 employees, there was a lot of time and money being spent on distributing the statements.
“The statements would go to a central mailroom then an internal mailroom for the different departments and we would need to get an HR person to hand them out to each associate, or have them delivered to some part-time associates who were not often in the store,” she said.
When HBC implemented an electronic pay statement system, the company saved 30 per cent per pay slip, said Panopoulos.
Timeliness is another issue that is addressed with electronic statements, said Van Alstine. The employer no longer needs to worry about the statements being delivered on time to the employees since they can be accessed as soon as they become available online, he said. This is an attractive feature for employees as well who will no longer need to wait to see their statements.
Ensuring a successful transition
If an employer is considering switching to electronic, communication is crucial in ensuring employees embrace the change and understand its advantages, said Smyth.
A major concern of employees is the security of their financial information, said Smyth. Employees should be reminded that this system is very secure with email access and a secure, encrypted password to access their information, said Smyth. It can be more secure than paper where there is no way to make sure that the pay statement doesn’t get into the wrong hands when it’s being delivered or placed on a desk, he said.
HBC worked with Buck Consultants in Toronto to implement this initiative and they put the process through an extensive internal audit.
“We wanted to make sure, from a purely technical point of view, that we were meeting the highest security levels in terms of transition of data so no one can access it except the associates,” she said. “As long as they keep their password confidential, it’s as secure as their online banking.”
Since switching from paper to electronic statements is a change in the condition of employment, employers must make sure they communicate this effectively and give sufficient advance notice of the change to all employees, said Van Alstine.
“We used every channel we had available to communicate the change,” said Panopoulos. “We spent a lot of time repeating the same message through email, corporate intranet, daily meetings and in-store posters.”
HBC distributed a document with information about the change and FAQs to each employee as well. The HR professionals at each store were trained on the site and on how to help associates comfortably make the switch, said Panopoulos. A computer was also provided in the store for employees to access their statements if they did not have a computer at home.
One of the biggest challenges of the switch was trying to convince the associates who preferred paper statements of the benefits of electronic.
“It really comes down to the HR person and how well they can manage the relationship with the associate and convince them of the benefit and make it easy for them,” said Panopoulos. “We helped them overcome their obstacles by creating solutions for them, like creating an email account and offering a place to print their statements.”
When making the switch, employers should work with a provider that has high security measures in place and is in compliance with all legislative requirements, said Van Alstine. They should also make sure employees have a secure and private way to print off the statement if anyone wishes to do so, he said.
The new electronic pay statement system has been well received by employees at HBC with a 80 per cent conversion rate, said Panopoulos.
“At the end of the day, people care about money being deposited into their account more than anything,” she said. “As long as it’s deposited and they don’t have an issue with the number, they’re happy.”
Top electronic pay considerations
Privacy and access: Employees must have a confidential means to view and access pay statements. Self-service kiosks can be used in the absence of a personal work station.
Ability to print: Employees must have the ability to print their pay statement at the workplace or at a remote location through a secure channel.
Choice of opting in or out: It is important to consider current employees as well as new employees. To avoid any legal issues, current employees should not be forced to opt for electronic pay statements; they should be asked to agree to receive their statements electronically. This can, however, be made a condition of employment for new employees.
Record retentions: Under federal legislation (Canada Labour Code, Part III) employers are required to keep a history of all electronic pay statements for current and past employees for a period of at least three years from the day on which the document is first provided to the employee. Such requirements vary across jurisdictions.
