E-Pay Stubs: Thinking About Defaults

Office of Management and Budget Director Peter Orszag announced on Monday that the National Finance Center, which processes payroll for 675,000 federal employees, will start issuing electronic pay stubs as a default.

The idea, which will save taxpayers $4 million each year, came out of the SAVE Award, a contest for federal employees to submit ideas to cut red tape and save government money. Over three weeks in the fall, feds submitted more than 38,000 ideas, and the public voted on the best submissions. The winner got to meet the president and to see her idea included in the fiscal 2011 budget request.

Tim O'Reilly, the open source advocate who coined the phrase "Web 2.0," hailed the government's move toward electronic pay statements as a product of effective crowdsourcing. He Google-buzzed,

When you're a platform provider, you get more for less. Apple wrote 10 apps or so, but ended up with 150,000 because they built platform capabilities and enabled third party development. What's really cool is how this thinking is permeating the government.

O'Reilly has said that "the choice of defaults is probably the single biggest choice any developer makes." He cited photo-sharing application Flickr's decision to make public the default value for uploaded photos as an example of the sweeping impact defaults have on how applications are used.

An important lesson about defaults that the government might take home from Facebook--which changed default privacy settings in December without announcing them, sparking a backlash--is that it ought to make sure that federal employees are aware of the new changes and can opt out easily.