CONTENTS. Introduction...ix The History of Electronic Pay... ix How to Use This Guide... x Other Information You Should Know... xi

Transcription

1 CONTENTS Introduction....ix The History of Electronic Pay.... ix How to Use This Guide... x Other Information You Should Know... xi Chapter 1: Electronic Payment Overview How Does the Direct Deposit Process Work? ACH Transaction Flow Key Points About Direct Deposit Anatomy of a Check-Example Anatomy of a Check-Example Federal Reserve Banking Holiday Schedule, 2016 and Same Day ACH Handling Credit and Debit Returns and Notifications of Change ACH Return Entry Codes Notification of Change NOC Responsibilities ACH Notification of Change Codes Chapter 2: Why You Should Be Interested in Increasing Direct Deposit via ACH Improved Payroll Performance Business Continuity/Disaster Recovery Cost Savings for All Companies Increased Service to Employees Responding to Employee Resistance Use ACH for More Than Paychecks Chapter 3: The Legal Framework Covering Direct Deposit Via ACH NACHA - The Electronic Payments Association The NACHA Operating Rules Federal Electronic Fund Transfer Act and Regulation E Fair Labor Standards Act (FLSA) State and Federal Laws and Regulations on Pay Media Federal Government Uses Direct Deposit You Can Help Promote Change Chapter 4: Aim for 100% Direct Deposit Participation At Companies That Emphasize Employee Services At Companies That Emphasize Quality and Control At Companies That Emphasize Productivity and Cost Savings At Companies Concerned With Loss of Float iii

2 Chapter 5: Developing the Company/Financial Institution Relationship Agreement Contact Your Company s Financial/Banking Institution First How to Choose an ODFI ODFI Selection Criteria Preparing a Service Agreement How Much Will It Cost? Who Should Be Responsible for Negotiations? ACH Origination Agreements: Important Terms to Consider Responsibilities of Employers That Use Payroll Service Providers Chapter 6: How to Promote Electronic Payments Within Your Company Promoting Electronic Payments Promoting Direct Deposit via ACH Educate Yourself and Your Payroll Department Analyze Your Payroll System or Service Provider s Capabilities Analyze the Demographics of Your Company s Work Force Sample Direct Deposit Survey Know Your Stuff About Direct Deposit Working With Unionized Employees Promoting Electronic Payments Educating yourself, your department and your targeted audience: Electronic vendor payments aka Direct Payments via ACH: Analyze your systems, service providers, and vendor capabilities: Analyze your vendor demographics: Educate your vendors about electronic payments: Mark Your Calendar for Direct Deposit and Direct Payment Month May Marketing Materials Direct Deposit via ACH Fact Sheet Direct Payment via ACH Fact Sheet Chapter 7: Implementation of Direct Deposit Via ACH Payroll Direct Deposit Project Plan Implementation Issues ACH Direct Deposit File Format File Organization File Specifications: Record Specifications: Processing Schedules Standard 3-Day ACH Processing Schedule Exception 2-Day ACH Processing Schedule Same Day ACH Processing Schedule Testing Direct Deposit Data Formats and Field Contents Rules for Reversing Files: iv

3 Data Formats and Field Contents for File Reversals: Reversing Entries: Definition: NACHA Rules - Subsections and Direct Deposit Sample Set-Up Schedule Direct Deposit via ACH Implementation Checklist Direct Payment via ACH Implementation Checklist Chapter 8: Administration of Direct Deposit Via ACH Decide What Information to Give Employees Setting Up New Enrollees Changes Authorized by Employees Resolve Late Deposit Issues Stopping Direct Deposit Daily ACH Processing Accounting for Transmittals Account Reconciliation/Auditing Holiday Processing Disaster Recovery Importance of Documentation Sample Authorization for Direct Deposit via ACH (ACH Credit) Sample Authorization for Direct Payment via ACH (ACH Debit) Sample Pay Statement Chapter 9: Third-Party Electronic Payments Child Support Payments Background of the Child Support Enforcement Program: A Standard Format for Direct Deposit of Child Support How the Process Works Benefits Third-Party Providers and State Disbursement Units Electronic Federal Payroll Tax Payments EFT Required for Federal Depository Taxes: The EFTPS Enrollment Process: What About Service Providers? Help Available for Employers: Involve Other Departments in Your Company: EFTPS Payment Options: ACH Debit Entry: ACH Credit Entry: What to Do If Something Goes Wrong: Electronic Tax Application: Cancellations Take Longer: Proving a Payment Was Made: v

4 Refunds and Reversals: Other Electronic Payments Chapter 10: International Payments International ACH Transactions Participants of an IAT Entry: Common IAT Scenarios: Additional IAT Screening and Compliance: IAT Returns: IAT Transaction Type Codes Chapter 11: Federal and State Regulations on Direct Deposit via ACH and Electronic Paycards Electronic Fund Transfer Act of Regulation E State Rules Governing Direct Deposit via ACH and Electronic Paycards Chapter 12: Payroll Debit Cards Benefits of Payroll Cards Types of Payroll Cards Payroll Card Bank Account Structure Employee Access to Funds Employee Promotion and Training Employee Enrollment Funding the Accounts Customer Service Cash Access and Fees Pay Stubs Compliance Issues Frequently Asked Questions for Employers Frequently Asked Questions for Employees Chapter 13: Electronic Payments in Accounts Payable Wire Transfer Methods of Transferring Currency: Credit and Debit Cards Electronic Check Processing (ECP) Direct Deposit and Direct Payments via the ACH Network Organizational Resistance to Moving to Electronic Payments Glossary...G-1 Commonly Used Acronyms... G-1 Glossary of ACH Terms... G-3 vi

5 Appendix A: Technical Information... A-1 ACH Operations Bulletin #1-2012, Use of Automated Enrollment Entries to Reroute Government Benefit Payments.... A-1 ACH Operations Bulletin #2-2012, Third-Party Tax Payments Banking Convention... A-4 ACH Operations Bulletin #1-2013, ODFI Warranty for Outbound IAT Entries... A-10 ACH Operations Bulletin #2-2014, ACH Transactions Involving Third-Party Senders and Other Payment Intermediaries... A-13 Same Day ACH: FAQ... A-38 Issues To Be Addressed in the Agreement Between the ODFI and the Originator or Third-Party Sender.... A-41 Appendix B: Agency Contact Information for Direct Deposit and Electronic Paycards... B-1 Appendix C: Electronic Child Support Payments Contact List.... C-1 Appendix D: Electronic Payments Articles From PAYTECH... D-1 Same-Day ACH Would Expand Payroll Options by Jan Estep... D-2 Federal Reserve Identifies Strategies to Improve the U.S. Payment System by Laura Cottrell, AAP... D-4 Thwarting Cyber Attacks on Payment Processing by Dee Byrd, CPP, PHR... D-6 Check State Laws, Consider Paycards for Termination Pay by Alma Stewart, CPP... D-9 Real-Time Payments Are the Future of Electronic Payroll by Dee Byrd, CPP, PHR... D-11 Appendix E: Electronic Payment Resources... E vii