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2% wage tax inadvertently not deducted from some ASG paychecks

Computer glitch says HR director

For American Samoa workers: No you didn’t get an increment raise, and no the 2% wage tax has not been repealed, and yes — you are paying it back, if it wasn’t deducted.

With the roll out of a new ASG computer system, the 2% wage tax was not deducted from payroll checks for some American Samoa Government employees, says Human Resources director Eseneiaso Liu, who has also set a deadline for submission of employees’ time sheets to ensure they are paid come payday.

Liu made the revelation in two separate memos  — both dated Mar. 24 — as well as a verbal explanation during the governor’s cabinet meeting on Tuesday at the Agriculture Department conference room.

Payroll Division has been under the jurisdiction of the Department of Human Resources for about two years, based on a directive at the time from Gov. Lolo Matalasi Moliga.


In an effort to improve the efficiency and quality of service provided by DHR, Liu informed directors in a memo that her department has transitioned from the IFAS 7.7 (computer) management system to ONESolution, which consolidates, streamlines and “automates many of our processes.”

And “we look forward to the service enhancements this conversion should provide,” she said, adding that DHR appreciates everyone’s patience, “as we work through this transition.”

She then revealed that following the roll out of the most recent phase of the new system, it “was noted that the 2% wage tax” was not been deducted from some ASG employees.

“To remedy this anomaly, a 2% wage tax adjustment will be noted on the next paycheck stubs of those specific employees,” she explained. Furthermore, the adjustment will enable those employees to be brought current in terms of their 2% wage tax obligation for 2017.

For employees whose paychecks had been properly deducted with the wage tax, they will not see the adjustment, she said, and asked directors to inform respective employees of this potential upcoming adjustment.

During the cabinet meeting, Liu gave a verbal explanation of the memo on the wage tax and apologized to the affected employees.

It’s unclear as to how many employees were affected, with the next ASG payday due next week Monday.

Samoa News heard from a few government employees and family members after the ASG payroll was released Mar. 20 that the 2% wage tax was not taken out of their paycheck. They were asking whether there is a new law, repealing this tax.

Other affected employees had wondered if there was some sort of error on the government’s part because many of their coworkers had the wage tax deducted, while others spoke of an ‘unannounced’ increment, perhaps?


On the issue of time card deadline submission, Liu said that to enable DHR to better manage paychecks for employees going forward, the department is implementing a “time card submission deadline of 3p.m. on the Monday prior to paycheck Monday.”

“Complete and accurate time cards submitted by this drop dead date will be processed for the following Monday’s paychecks,” she emphasized in the memo. “Incomplete or inaccurate time cards will not be processed, but will be returned for corrections.”

She said the deadline for time card submission would take effect Apr. 10.

And the only exception to the deadline will be when a holiday is observed on a Monday and then the deadline will be moved to 3p.m. on the Tuesday after the Monday holiday.

Liu said processing ASG’s payroll has been a complicated undertaking for DHR’s relatively few payroll staff members given the many ASG agencies “and the more than 4,000 employees” the payroll staff has to manage.

She apologized for the previous delays and inaccuracies in paychecks, but said DHR has identified procedural gaps and inefficiencies internally and has designed solutions for such.

“Externally, however, a continuing challenge in our payroll process has been the incomplete, inaccurate and late time cards that are submitted by departments,” she explained. “Having to manage these time card submission issues, within an already compressed time window, exacerbates our efforts and contributes to the delays and inaccuracies mentioned.”

The workload further increases during the summer for the youth employment program.

“We firmly believe that the solutions we’ve designed internally, coupled with this time card submission deadline, will mitigate paycheck delays and inaccuracies previously experienced,” she added.

Almost every ASG period, Samoa News gets complaints from employees who didn’t get a paycheck. And without the paycheck, the employees start speculating about the cause of the problem.

When some ASG employees didn’t get their paychecks last week Monday, there were calls of complaints to Samoa News. It’s understood that those who didn’t get paid last Monday, did get their check on a supplemental payroll run last week Wednesday. In some cases, however, Samoa News understands grant funding for some programs are on hold, and ASG is unwilling to ‘front’ the money pending resolution of the grant issue.