If California’s state payroll system were a person, it would be nearing its 70th birthday this year.

Like some septuagenarians, the payroll system periodically finds itself struggling to keep pace in the modern age. Unions, workers and lawmakers alike have taken turns over the years bashing the system for delays in payroll changes and occasional pay mistakes. In the last six years, two different state worker unions have either taken or threatened legal action against the state due to delayed raises.

Still, despite the burden of a cumbersome and outdated apparatus, the State Controller’s Office together with departmental human resources departments and CalHR manage to deliver timely and correct paychecks to the vast majority of state workers every month — nothing short of a small miracle.

Back in the 1950s when the system was first developed, the state employed about 40% fewer workers and didn’t engage in collective bargaining until the late 1970s. Today, nearly 300,000 workers across state civil service and the California State University and University of California systems rely on the payroll system for their paychecks.

State controllers have envisioned a complete overhaul of the system since at least 1999, when the Legislature dedicated $1 million to the project. A previous modernization attempt was scrapped by former Controller John Chiang after a failed roll-out to a small number of employees in 2013. The state ended up settling a lawsuit in 2016 and received a $59 million refund from the vendor.

The latest reinvention effort, branded as the California State Payroll System Project, started in 2016 and won’t be completed until at least 2028. Under the new system, state workers could be paid on a more typical bi-weekly basis rather than once a month — a shift that would give employees more financial flexibility as they juggle budgets and combat inflation. Budget documents from this year show that the state has authorized more than $200 million in spending for the overhaul, and the project’s total estimated cost hovers around $715.5 million.

Trying to figure out how the aging payroll system operates is a challenging endeavor. Monique Langer, who oversees public affairs for the Controller’s Office, admitted that even she didn’t entirely understand the payroll process.

“Payroll isn’t just keying something in and printing the check,” she told The Sacramento Bee in August. “These transactions and personnel are a vital part of the payroll process,” she said, “but all state agencies and many divisions within the State Controller’s Office work together to make payday possible.”

Timecard to paycheck: How do state workers get paid?

The payroll process starts with employees’ timecards. Each department can choose how it tracks employees’ hours, and in large departments such as the Department of General Services, different employees use different methods.

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