House introduces resolution to resume govt payroll deductions
The House of Representatives moved to address the outcry from members of the private sector as well as government employees, who are affected by the payroll deduction changes, which Treasurer Falema’o Phil Pili implemented recently, in a resolution to Gov. Lolo M. Moliga.
The resolution, co-sponsored by Representatives Atualevao Gafatasi Afavala, Timusa Lam Yuen, Maugaoalii Leapai Sipa Anoa’i, Faimealelei Anthony Allen, Puletuimalo Dick Koko, Fatulegae’e Palepoi Maugaa and Talaimatai Elisara Su’a, was introduced in the House yesterday.
The resolution requests the governor to direct the Treasurer to resume payroll deductions on the salary checks of government employees so that they may better manage their personal finances, and provide a system that will assist in the collections efforts of creditors and businesses.
According to the resolution, the Treasurer decided to discontinue automatic deductions from the payroll checks issued to government employees for payments made to local private vendors and creditors. Treasury for years has processed the payroll checks for government employees to include automatic and programmed deductions to the creditors, and this automatic deduction is an invaluable service offered to employees, who make arrangements with creditors to have payments made directly out of their paychecks.
“This practice of applying payroll deductions has far more benefits than mere convenience to the parties involved and it provides a mechanism to employees to better manage their finances and also makes them more responsible borrowers,” the resolutions says.
“At a time when credit scores have become the single most important criterion of credit worthiness, it is important to offer automatic payment systems to ensure timely and assured payment of debts.”
Payroll deductions, says the resolution, will assist in the growth of the local economy and the total losses from bad debts, late payments, processing of payments and collections which often times include litigation can all be avoided if a system of automatic deduction is put in place for the government, which makes up more than one-third of the work force in the territory.
The resolution states that there are many factors that make the discontinuation of payroll deduction more than a mere inconvenience.
In particular the resolution notes, “the discontinuation of payroll deductions only applies to the private sector, yet automatic deductions will still be available to government utilities, authorities and off island entities including federal government creditors. It is perplexing and disconcerting to see why this same service cannot be provided to government employees and the private sector who both contribute to the revenues of the government and the support of economy.”
The resolution was assigned to the Budget Committee chaired by Rep. Timusa Lam Yuen.
During a cabinet meeting last month, Deputy Treasurer Ueligitone Tonumaipe’a said the government is being used as a collection agent by these private businesses and they were not getting paid for the service and "that is the main reason why we are discontinuing these deductions."
He explained that currently it takes up to four days to process the payroll because of all the deductions, yet it should only take one day.
However, he said, the government will still be deducting regular payroll taxes, as well as Retirement, Red Cross, USDOE Student loan, garnishments (court order), LBJ, ASTCA, ASPA, SBA loans and USDA loans.