B2B Payments

US Government Plans $20M Payroll Upgrade After Shutdown Debacle


The U.S. Federal Government is gearing up to overhaul and upgrade its payroll technology thanks to a $20.7 million investment from the Technology Modernization Fund.

Reports in GCN this week said the government has announced funding for the payroll project that will upgrade the way an estimated 800,000 federal employees are paid. The enhancements follow technical problems resulting from a 35-day government shutdown, which caused problems in paycheck deductions and missed payments for some workers, reports said.

The government's use of multiple payroll systems means addressing those issues can be a challenge. Plans for the upgrade mean a single, cloud-based payroll system, operated by the General Services Administration (GSA), would be used across all government agencies.

The GSA plans to make the NewPay payroll software-as-a-service solution available across agencies and cloud-hosted, which would allow the GSA to move payroll management out of an existing data center in Kansas City, Mo., the publication said.

"As the last proposal accepted in 2018, the Board believes the NewPay proposal is a critical step forward to transform an antiquated technical and operational process," said Federal Chief Information Officer Suzette Kent in a statement.

According to the Technology Modernization Fund's website, "most Federal payroll operations use decades-old legacy software, which is costly as well as difficult to maintain." The existing data center has not been updated "in many years and is in serious need of modernization," the TMF added.

Reports said the government's NewPay payroll projects is among the largest to receive funding from the TMF Board, which has so far allocated nearly $90 million of $100 million available to several projects.

Canada attempted to upgrade its own government payroll operations through a contract with IBM to operate Oracle payroll software, but the initiative, which launched in 2016, quickly saw technical problems emerge. Some government employees were paid too little or too much, reports said last year, with the government ultimately deciding to end the project.



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