If I understand the payroll lag correctly, the money from my paycheck no longer will have been deposited and be available in my account on the first day of the month. It could lag until the second, third, or fourth of the month and so on.
I have my mortgage and several other payments automatically deducted on the first. I don't have enough money saved to cover the gap - the time between the paycheck deposit and my automatic deductions. I'm worried about being overdrawn and charged late fees.
ANSWER: Despite what you may have heard at a school meeting, the payroll lag change is not expected to begin before January 1997, said Mary Pat Waterhouse, state deputy comptroller.
The 1996 Legislature approved the payroll lag but the measure has not yet been signed into law by the governor. Gov. Ben Cayetano is expected to sign it. Once it is signed, the state will begin a major effort to educate employees on how they will be affected, provisions of the bill and the actual dates on the 1997 calendar.
"We want to give people enough time to save some money. We realize it could create hardships for some," Waterhouse said.
The proposed calendar calls for paychecks to be issued or direct deposits to be made Jan. 16 and 31; Feb. 18; March 4 and 20; April 4 and 22; May 8 and 23; June 10 and 26; July 11 and 28; and Aug. 14 and 29. Starting in September 1997, the paycheck dates would return to the usual 15th and last day of the month.
There will be both printed material and meetings to explain the changes, and some lessons will be conducted on finances and budgeting.
Waterhouse said state officials also have met with officials of some financial institutions to discuss possible effects and to try to prevent problems. Additional meetings are expected.
Vernon Omori, senior vice president for residential real estate development, said First Hawaiian Bank has a policy of not charging a late fee on home mortgage payments until the 15th of a month.
"We'll be working with the state; there may be special cases in which we'll have to make other adjustments," Omori said.
Shari Murata, service manager for residential loans for Bank of Hawaii, said, "In most cases we do not assess home mortgage late charges until 15 days after the due date."
Obviously, there will be many more financial institutions involved. Some workers also will have other payments due at various times of the month for gas, electricity, water and sewer, telephone service, cable television, and possibly other loans for such things as vehicles and tuition.
Waterhouse said state workers with additional questions may call the comptroller's office at 586-0402.