ARCHIVED CD 2008-008
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Note This document has been modified. The changes are identified by a vertical line "|". Revision (|)
April 10, 2008 (Revised April 21, 2009)
SUBJECT: Direct Deposit for Regular Pay and Supplementary Payments
1.1 The purpose of this directive is to provide client departments and pay offices with information concerning the availability of direct deposit (DD) for regular pay and supplementary payments.
1.2 A notice of information to employees concerning the above subject has been included with this Compensation Directive.
2.1 Since it was launched, DD has only been available for regular biweekly payments to employees paid currently (7C and 6C cycles). Until now, regular pay for employees paid in arrears and payments issued to all employees on supplementary pay runs were issued by Receiver General cheques.
2.2 After consultation with Treasury Board Secretariat and the unions, Public Works and Government Services Canada (PWGSC) is proceeding with the necessary system changes to allow the majority of supplementary payments to be deposited directly into employees' bank accounts and to provide DD service to many employees on arrears pay.
2.3 The new process is expected to further reduce the volume of paper cheques and the processing costs associated thereof.
2.4 The House of Commons (HOC), Pay Office 22, and the Canada Revenue Agency (CRA), Pay Office 03, are excluded from this process as there are separate memoranda of understanding with these organizations that provide other arrangements.
3.1 In accordance with the Treasury Board (TB) Circular 1992-6, issued August 28, 1992, DD is offered on a voluntary basis for current employees who were on strength prior to September 1, 1992. On or after September 1, 1992, DD is mandatory for all persons newly appointed in the Public Service on an indeterminate basis or for a specified period where the term is greater than, or is extended beyond, six months.
3.1.1 In accordance with the TB Circular 1992-6, the DD of supplementary payments is mandatory in the same manner as the DD for regular payments.
3.2 Many new employees are initially hired in the Public Service for short periods and may work irregular hours. For this reason, clients may opt to pay these employees in arrears for their regular pay. Due to system limitations, DD for employees paid in arrears has not been possible until now.
3.2.1 Similarly, DD for supplementary payments has not been possible in the past. The new process will allow employees to receive these payments by DD and offers the option to deposit them into a different bank account from regular pay.
3.3 Effective April 30, 2008, employees hired on an indeterminate basis or for a specified period where the term is greater than, or is extended beyond six months, paid on 7A or 7B cycle, are subject to mandatory DD for regular pay and supplementary payments.
3.3.1 In addition, all employees currently receiving their regular pay by DD , will have their supplementary payments issued to them by DD to the same or a different bank account. All departments under Treasury Board and separate employers will be subject to the new process.
3.3.2 DD for regular pay and supplementary payments will now be available to employees paid on Biweekly Current (7C), Monthly Current (6C), Biweekly Arrears Positive (7A) and Biweekly Arrears Negative (7B).
3.3.3 This policy applies to all departments and agencies for which Treasury Board is the employer.
3.4.1 Certain types of payments will be exempted from the DD process. These include termination payments, return of contributions, severance pay issued to registered retirement savings plan (RRSP) accounts, and payments related to death in service. These payments will continue to be issued by cheque.
| 3.4.2 Retroactive payments for the purpose of new collective agreements or compensation plans either processed by PWGSC (automatic revisions) or client departments (manual inputs) will also be issued by cheque to allow departments to verify amounts and coordinate the release date internally.
| NOTE: When a revision (PAC 09) transaction is used to adjust an employee's salary on or after the effective signing date of the Collective Agreement, the payment will be made via DD . However, if the effective from date of the PAC 09 is before the effective date of signing, the system will generate a paper cheque.
3.5. REQUIREMENTS FOR SUPPLEMENTARY DIRECT DEPOSIT
3.5.1 Employees who are grandfathered as outlined in TB Circular 1992-6, but who wish to have supplementary payments made via DD must first opt for DD for their regular pay.
3.5.2 All employees currently receiving their regular pay by DD will automatically begin having their supplementary payments deposited to the same account as is currently used for their regular pay.
3.5.3 Employees who wish to identify a separate account for supplementary payments, must arrange this through their compensation advisor.
Compensation advisors will be responsible for managing the bank account information when the employees opt to have a different account for their supplementary payments.
4.1 As in the past, the Direct Deposit Enrolment Form (PWGSC-TPSGC 8437 ) must be completed to enrol new accounts to DD . The form has been modified to allow for the identification of a separate bank account for supplementary payments, if desired.
4.2. BANKING INFORMATION
4.2.1 On implementation, all employees currently receiving their regular pay by DD will automatically be activated for supplementary DD. Initially, the banking information will be identical to the banking information that is recorded in the pay system on April 29, 2008, for regular pay.
Employees who wish to have supplementary payments deposited to a separate account must provide their compensation advisor with an enrolment form containing the appropriate information.
4.2.2 Compensation advisors will create the necessary actions to commence or change the banking information and DD status for regular and supplementary payments, based on the information provided by employees. Input instructions may be found in the Personnel-Pay Input Manual (PPIM) Section 4-4-12-2 for hard copy input, or Section 14-12-1 for on-line input.
4.3. SYSTEM UPDATING
4.3.1 DD will be automatically turned off for both regular pay and supplementary payments whenever an account is struck off strength (SOS) or transferred out (TOU). DD will be turned off for supplementary pay only for accounts that are temporarily struck off strength (T-SOS) after April 29, 2008.
4.3.2 Where the reason for T-SOS is maternity leave (K) or parental leave (R or S), the compensation advisor will have the option of reactivating the supplementary DD indicator to accommodate the top up payments.
4.3.3 On return from leave without pay (retaken on strength [RE- TOS ]), a message will be generated to the compensation advisor to indicate that the employee is active for DD of either regular or supplementary payments as follows:
- WF2 "EMPL REG PAY BY DIRECT DEPOSIT"
- WF4 "EMPL SUPP PAY BY DIRECT DEPOSIT"
4.4 In the event that the Standard Payment System (SPS) cannot process a payment to an employee's bank account for any reason, a system-generated transaction will be sent to the Regional Pay System (RPS) to change the DD indicator to a "2" for both regular and supplementary payments, whenever the bank account information, found in elements 950 and 979, is identical.
4.4.1 Since DD status will cease when an SOS is processed, all termination payments, including those specifically noted in Section 3.4, will continue to be issued by cheque.
4.5. POSTDATING OF PAYMENTS
4.5.1 As of April 30, 2008, all payments issued by the RPS will be postdated. Regular pay for 7C accounts will continue to be postdated ten business days, and regular pay for 7A and 7B accounts will be postdated six business days. Supplementary payments for 7C accounts will now be postdated seven business days. For example, the supplementary update for payments (by cheque and DD) for April 30, 2008, will be dated May 9, 2008.
4.6. DIRECT DEPOSIT INTERCEPTS
| 4.6.1 Access to intercept DD payments is being made available to client departments and separate employers, for compensation advisors with "PAB" and/or "Inquiry" access. This is expected to reduce the number of overpayments and cancelled cheques returned to the Financial and Payroll Accounting Division (FPAD).
| 18.104.22.168 When an intercept is actioned, it should be noted that the payment will be cancelled, and should therefore only be considered when the employee is NOT ENTITLED to the payment.
4.6.2 A new option will be available from the on-line inquiry menu called Register Data Base (RDB). When selected, the RDB will display the SPS information so that compensation advisors may determine if a payment must be intercepted.
NOTE: Intercepts may be processed up to three business days prior to the due date.
4.6.3 When selected, a sub-menu screen will be displayed. The user will have the option of selecting recent payments by Department/Paylist/Personal Record Identifier (PL/PRI)
If no data is available, a message "NO DATA AVAILABLE" will be displayed.
| NOTE: Where a zero balance statement of earnings has resulted from an incorrect input, the payment may be cancelled by the department returning the statement to the FPAD . Once requested, they will cancel such payments on due date of the payment.
4.6.4 If the " DEPT / PL / PRI " option is chosen, only records pertaining to that account will be displayed on the "PAYMENT REQUEST NUMBER" screen.
4.6.5 A payment is considered to be a "Recent Payment" if it is:
- A Supplementary Payment with due date up to seven business days in the future.
- A 7C Regular Pay with due date up to ten days in the future.
- A 7A/B Regular Pay with due date up to six days in the future.
Supplementary Run Date: April 30, 2008,
Payment Date: May 9, 2008,
Intercept is possible from May 1 until May 6, 2008.
Once the due date of a payment is reached, the payment will be dropped from this screen.
4.7. INTERCEPT PROCEDURES
| 4.7.1 If an employee is not entitled to a payment and it must be intercepted, compensation advisors will select the specific payment from the list of payments displayed on the "PAYMENT REQUEST NUMBER" screen by placing an "S" beside that payment record.
This will display the "PAYMENT DETAILS" screen. The compensation advisor will enter an "I" beside the prompt "TO INTERCEPT THIS PAYMENT, ENTER "I".
The SPS will validate that the payment is still available to be intercepted, and the following message will be displayed immediately:
- PD660 INTERCEPT REQUEST WAS SUCCESSFUL.
Finally, a payroll register will be produced showing the payment that has been intercepted.
| NOTE: An intercept (i.e. cancelled payment) should only be actioned in the event of non-entitlement. Where an employee's banking arrangements have changed, the employee should make arrangements directly with their financial institution.
4.7.2 If the payment is no longer available to be intercepted (i.e. the date the intercept is requested is less than due date minus three business days), the following message will be displayed:
- PD661 INTERCEPT NOT POSSIBLE. SEE RECALL PROCEDURES.
22.214.171.124 To prevent the payment from being credited to the recipient's account in the cases of overpayments due to SOS , T-SOS , LWOP , etc. or any other reason for non-entitlement, compensation advisors should follow the instructions for either an "Intercept" or "Recall" action contained in the PPIM 7-5, 7-5-1 and 7-5-2.
126.96.36.199 When a bank branch CANNOT deposit the Direct Deposit Payment to an employee's account, that branch will issue a Returned Item Voucher (RIV) to the Responsible Site where the returned payment will be logged into the Standard Payment System (SPS) resulting in a replacement cheque being produced. Please refer to PPIM 7-5-1 for instructions on processing a recall request.
4.8. PAY OFFICE RESPONSIBILITIES
4.8.1 The introduction of direct access by client departments to the SPS intercept process will eliminate the need for Pay Office intervention on behalf of the client department.
4.8.2 Recalls will continue to be processed by pay offices as they have been in the past. Please refer to PPIM 7-5-1 for instructions on processing a recall request.
5.1 Any inquiries on the information contained in this document should be addressed to your PWGSC Compensation Services Office.
Original Signed by
Accounting, Banking and Compensation
Reference(s): CJA 9015-6
- Date modified: