Mandatory direct deposit for Paterson employees voted down | Paterson Times

Mandatory direct deposit for Paterson employees voted down


The city’s governing body voted down a measure that would have forced almost 2,000 municipal employees to receive their pay solely through direct deposit.

Supporters of the measure which would have come into effect in January touted it as a forward step for a city, but its detractors saw it as an attack on free choice.

“I like the idea,” said Julio Tavarez, 5th Ward councilman. “I think we’re far behind.” He recalled a time when the city had few banks and plenty of predatory check-cashing places that charged a fee took a percentage of workers’ pay check.

“They need to have their account,” said Maritza Davila, councilwoman at-large. She said there was mixed feelings among employees in the Passaic County Community College – where she works – when it decided to switch to mandatory direct deposit; however, she said workers adapted.

Davila suggested a bank account is a must have in today’s world of ATM, credit cards, and e-cash. She said city employees should all have bank accounts to build credit, learn to write checks. She said it would financially empower employees.

“We can’t talk about empowerment when we’re taking away free choice,” said Kenneth Morris, councilman at-large, who vehemently opposed the measure.

The city was prepared to hold bank fairs to connect unbanked employees to financial institutions. James TenHoeve, the city’s finance director, said about 50-percent of employees already receive their pay through direct deposit.

“I was surprised at 50-percent,” said William McKoy, 3rd Ward councilman. He said he expected that number to be much higher.

TenHoeve said the city would have saved $6,000 to $8,000 from mandating direct deposit. “The savings are not a lot of money,” he said. He added a switch to paperless paycheck where employees would receive their pay via direct deposit and have the ability to print their pay record via the internet would have yielded much more in savings.

Tavarez, who was one of the three votes – Mohammed Akhtaruzzaman, 2nd Ward councilman, and Davila being the other two — in favor of the measure, said, “If there are people who can’t handle this we need better employees.” He said the measure was a win-win for employees and the city. The former would be connected to the modern banking and the latter would obtain savings for taxpayers.

McKoy, who voted against along with Morris, Ruby Cotton, Andre Sayegh, and James Staton, said the city should launch a campaign to get employees to voluntarily opt in for direct deposit. Create a campaign to sell direct deposit, said McKoy. He suggested placing a flyer in the paycheck envelope stating the benefits of direct deposit.

Some council members opposed the measure because, they said, it would cause financial hardship for city employees, some of whom make subsistence income. Morris said many banks require minimum balance which would force employees to keep a portion of their pay check in the bank to maintain the account.

After the measure was voted down on Tuesday evening, Morris declared it was a victory for liberty.

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