Frequently Asked Questions Regarding Pay Dates/Direct Deposit Posting Dates
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.
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.
Will I be eligible for Direct Deposit if I work out-of-state?
How does this differ from the Payroll Deduction Program that is currently available?
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.
How do I sign up for Direct Deposit?
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 CalATERS system, etc.) will be made by Direct Deposit.
What is the bank routing number and account number requested in the Enrollment Authorization Form?
- 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.
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.
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 visit Pay and Deposit Posting Dates .
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.
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 (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.
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.
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.
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).
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.
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.
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.
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.
If a person is on Direct Deposit and wants to change financial institutions, how long should they keep their old account open?
To re-designate or change your account and/or financial institution, 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.
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 tell 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.
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.
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.
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.
Whom do I contact if I have any questions about Direct Deposit?
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