us to extend the maturities of our investments. This strategy ladders the maturities of our investments, helping to minimize the impact of changes in market interest rates. During fiscal 2008, the Fed Funds rate declined 325 basis points, yet the net impact to ADP compared with a year ago was an increase of 10 basis points in the overall yield to 4.4%.

      Employer Services

      Growth in new business sales of our core solutions across all market segments, along with strong sales of our HR BPO offerings, contributed to Employer Services’ 9% revenue growth.

      We launched the RUN Powered by ADP ^sm platform, our web-based payroll service for small businesses and their accountants – early results and client receptivity have been terrific. And we’re really focused on the large opportunities for our Retirement Services and Workers’ Compensation Pay-by-Pay ^® solutions as extensions of our core offering for small businesses.

      Our Administrative Services Offering, also called ADP Resource ^® , is our HR BPO offering for the small and mid-markets and is an excellent option for prospects that don’t fit the co-employment PEO model. Sales of ADP Resource below fifty pays continue to fuel our small business growth. Additionally, sales of ADP Resource have been quite strong in the 50 to 100 pay-size market, and we’ve got a terrific opportunity with prospects above the 100 pay-size with the launch of an offering based on our Pay eXpert ^® and HR/Benefits solutions.

      Our new “core” offering, a bigger, comprehensive bundled solution of our payroll, HR/Benefits, and Time & Labor Management offerings has been driving growth in the mid-market, bringing in new payroll clients with three times the revenue opportunity of a traditional payroll client.

      Comprehensive Outsourcing Services (COS) fueled growth at the high end of the market above 1,000 pays, as did GlobalView ^® for large multinational companies. COS achieved profitability as we generated $140 million in revenues in fiscal 2008 and significantly reduced the time it takes to get a new client up and running. More than 50 clients with over 550,000 employees in the U.S. are currently using our COS solution. In addition, GlobalView generated nearly $40 million in revenues in fiscal 2008, exiting the year with 65 clients, representing over 375,000 employees in 33 countries. Including clients already running on GlobalView, we have signed 78 clients representing nearly one million employees in 46 countries. We currently expect GlobalView to become profitable in fiscal 2010 and to approach $500 million in annual “live” and signed revenue by fiscal 2013.

      Surrounding these great ADP solutions are significantly increased investments in service and implementation which are making for an even better client experience.

      Employer Services’ pretax margin expanded 90 basis points for the year. This improvement is a result of continued operating leverage from the significant scale in our business, as well as our margin expansion initiatives. We now have over 300 telesales associates supporting our direct salesforce by selling beyond payroll solutions, such as workers compensation insurance to our small and mid-sized clients. With a substantially lower cost of sales compared to traditional “feet-on-the-street,” telesales sold over $80 million of the nearly $1.15 billion of total new business sales in fiscal 2008. We anticipate that will grow over the next few years to eventually contribute about one-third of total new business sales.

      We also completed the consolidation of our data centers in the last quarter of fiscal 2008 and anticipate realizing the first full-year benefit from that initiative in fiscal 2009. We continue to leverage both off-shore and smart-shore locations. We are expanding our presence in India where we have nearly 3,000 associates, and our smart-shore locations in El Paso, Texas; Augusta, Georgia; and Jackson, Mississippi, where collectively we have over 1,500 associates. Through growth in the business and margin expansion initiatives, we are committed to driving pretax margin expansion of at least 50 basis points each year while we continue to invest in new products, salesforce expansion, and implementation and client services resources to drive our five-point strategic growth program.

      PEO Services

      The PEO had another great year, growing revenues 20% to cross the billion dollar revenue mark. Growth in the PEO was fueled by strong growth in California, and we expanded deeper into existing geographies as well as opened a number of new markets. Nearly all of our regions had double-digit growth, expanding the average number of paid

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worksite employees 18% to 176,000, and ending the year with approximately 188,000 paid worksite employees. While the challenging economy is anticipated to result in slower new business sales growth in fiscal 2009, the PEO benefits from about half of its sales coming from up-selling our PEO solution to our existing payroll clients. We are able to create substantial lead flow by leveraging the Small Business Services salesforce in addition to the direct PEO sales organization.

      Dealer Services

      Dealer Services had a terrific fiscal 2008, growing revenues 8.5%. I am very pleased with the strong North American sales growth where sales of solutions beyond the core Dealer Management Systems (DMS), such as Voice Over IP Telephony and BZ Results, a web-based, on-line Digital Marketing and Advertising solution, offset slower sales in the core DMS. As a result of slower new car sales in the U.S., there was a small decline in growth rates relating to transaction-based activities, Computerized Vehicle Registration (CVR) and credit checks. This is anticipated to continue into fiscal 2009, however, these transaction-based revenues account for only about 10% of Dealer Services revenues. I am also quite pleased with sales of our Autoline product which drove Dealer Services’ strong international sales growth, and we have a healthy implementation backlog of new business. Dealer Services continues to gain market share with excellent client retention and win/loss rates that continued to improve from strong levels a year ago.

      Dealer Services’ pretax margin expanded 75 basis points, benefiting as well from the off-shore and smart-shore initiatives mentioned earlier for Employer Services. Additionally, we expect the international business to continue to increase margin as it grows.

Shareholder-friendly Actions

      ADP remains keenly focused on increasing shareholder value. ADP has returned excess cash to its shareholders through significant share repurchases and higher dividends.

      Over the last three fiscal years ADP has returned nearly $5 billion in the form of share repurchases, buying back nearly 18% of the company’s outstanding shares, or just over 100 million shares, since the beginning of fiscal 2006. Our board of directors recently authorized an additional 50 million shares for repurchase, bringing total remaining share repurchase authorizations to about 60 million shares. We exited fiscal 2008 with $1.7 billion in cash and marketable securities on our balance sheet and generated $1.8 billion in operating cash flow. We continue to remain optimistic about ADP’s long-term opportunities for growth, and it is our intent, depending on market conditions, to continue to repurchase shares in fiscal 2009.

      We have also increased the dividend over 80% since the beginning of fiscal 2006, raising both the dividend payout ratio and yield well above historical levels, to about 50% and over 2.5%, respectively.

      Return on equity from continuing operations increased over four percentage points to a very healthy 22.7% in fiscal 2008, and we anticipate continued improvement in fiscal 2009.

Management and Board of Directors

      We promoted Mark Benjamin, Mike Capone, Bob Karp, and Anish Rajparia to the position of corporate vice president in recognition of their contributions to ADP’s success.

      Four new members were elected to ADP’s board of directors during fiscal 2008. Eric C. Fast, Charles H. Noski, Sharon T. Rowlands, and Gregory L. Summe joined the board with many years of collective business experience.

Outlook

      In July, we provided ADP’s outlook for a solid fiscal 2009 with 7% to 8% revenue growth and 10% to 14% earnings per share growth compared to $2.18, excluding a one-time gain, in fiscal 2008. As we look ahead, we expect the economic headwinds from fiscal 2008 to continue. ADP, however, is fortunate to be able to look at the challenges of a tightening economy in a different way than most companies:

• We have 90% recurring revenues;

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• Our clients stay with us, on average, over ten years;
   
• We have excellent margins;
   
• We have strong and consistent cash flows and low capital expenditure requirements;
   
• We are one of only a handful of triple-A credit-rated companies left in U.S. industry today; and
   
• The markets we serve are under-penetrated and growing.

      Also, even during challenging times like these, we continue to invest in product, sales, and service. Growing the business for the future despite tough economic challenges is important for ADP’s long-term success. More importantly, as companies search for ways to become more efficient, in many cases they are looking for the solutions ADP provides. Clients win by using our solutions even in tight times. We’re more effective, compliant, and cost efficient. It’s a win-win to have solutions provided by ADP.

      We are much better positioned to meet our long-term revenue, pretax margin, and earnings per share goals as ADP is not the same company it was during the last economic downturn in 2002 and 2003. The differences bear repeating here:

• We trimmed the slower-growing businesses in our portfolio, resulting in a keen focus on growing Employer Services, PEO Services and Dealer Services, all of which operate in large, under-penetrated markets.
   
• ADP’s solution set and global reach have never been stronger. We now have a full range of HR BPO solutions to serve any size employer. This compares with five or six years ago when our HR BPO offerings were nascent with the PEO being our sole HR BPO solution. And at that time, our PEO was much smaller, serving less than half the worksite employees and generating one-third of the revenues it does today. Additionally, five or six years ago, ADP did not have a product to meet the global needs of large multinational companies. In order to compete in that market, we developed GlobalView in 2002 with a handful of clients in the Asia/Pac region processing in just a few countries. In 2004 we took GlobalView from a region-specific solution to a truly global solution, by developing the templates to enable web-based, hosted, global payroll processing in 46 countries. And our COS offering, launched in fiscal 2004, was not as robust a solution as it is today. ADP’s COS solution includes managed payroll services, where ADP becomes the client’s payroll department, as well as time and labor management and benefits administration. Employee call centers and web-based portals for communications enable ADP to provide World Class Service to its clients and their employees. ADP’s domain expertise and product scale uniquely position us in the marketplace.
   
• We have entered adjacent markets via acquisition – solutions such as HR/Benefits with Employease, applicant management with VirtualEdge, and job tax credit with Mintax, all in Employer Services, and BZ Results Digital Marketing and Advertising in Dealer Services, are helping drive growth today.
   
• And, lastly, we had only just begun to put our extended investment strategy into place in late 2000. Now fully implemented, the strategy has successfully mitigated the impact of the downward movement in the interest rate environment during this last year.

      So despite the challenging economic environment, I remain highly optimistic regarding ADP’s ability to deliver continued strong results in fiscal 2009 and for many years to come.

G ARY C. B UTLER

President & Chief Executive Officer

September 26, 2008

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This Letter to Shareholders and other written or oral statements made from time to time by ADP may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Statements that are not historical in nature and which may be identified by the use of words like “expects,” “assumes,” “projects,” “anticipates,” “estimates,” “we believe,” “could be” and other words of similar meaning, are forward-looking statements. These statements are based on management’s expectations and assumptions and are subject to risks and uncertainties that may cause actual results to differ materially from those expressed. Factors that could cause actual results to differ materially from those contemplated by the forward-looking statements include: ADP’s success in obtaining, retaining and selling additional services to clients; the pricing of products and services; changes in laws regulating payroll taxes, professional employer organizations and employee benefits; overall market and economic conditions, including interest rate and foreign currency trends; competitive conditions; auto sales and related industry changes; employment and wage levels; changes in technology; availability of skilled technical associates and the impact of new acquisitions and divestitures. ADP disclaims any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise. These risks and uncertainties, along with the risk factors discussed under “Item 1A. - Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended June 30, 2008, should be considered in evaluating any forward-looking statements contained herein.

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AUTOMATIC DATA PROCESSING, INC.   One ADP Boulevard · Roseland, New Jersey 07068 _________________________ NOTICE OF 2008 ANNUAL MEETING OF STOCKHOLDERS _________________________

     The 2008 Annual Meeting of Stockholders of Automatic Data Processing, Inc. will be held at 10:00 a.m., Tuesday, November 11, 2008 at our corporate headquarters, One ADP Boulevard, Roseland, New Jersey, for the following purposes:

1.	to elect a board of directors;
2.	to approve the 2008 Omnibus Award Plan;
3.	to ratify the appointment of Deloitte & Touche LLP, an independent registered public accounting firm, to serve as our independent certified public accountants for the fiscal year 2009; and
4.	to transact any other business that may properly come prior to the meeting or any adjournment(s) thereof.

      Stockholders of record at the close of business on September 12, 2008 are entitled to vote at the meeting. Each stockholder is entitled to one vote for each share of common stock held at that time.

      The presence in person and/or the representation by proxy of the holders of record of a majority of the issued and outstanding shares of stock entitled to vote at the meeting constitutes a quorum. If you do not expect to be present at the meeting, you may vote your shares of stock by phone, via the Internet or by executing and promptly returning the accompanying proxy in the enclosed envelope, which requires no postage if mailed in the United States.

      Admission to the meeting is restricted to stockholders and/or their designated representatives. If your shares are registered in your name and you plan to attend the meeting, your admission ticket will be the top portion of the proxy card. If your shares are in the name of your broker or bank or you received your proxy materials electronically, you will need to bring evidence of your stock ownership, such as your most recent brokerage account statement. All stockholders will be required to show valid picture identification. If you do not have valid picture identification and either an admission ticket or proof of your stock ownership, you will not be admitted to the meeting. For security purposes packages and bags will be inspected and you may be required to check these items. Please arrive early enough to allow yourself adequate time to clear security.

By order of the Board of Directors JAMES B. BENSON Secretary

September 26, 2008
Roseland, New Jersey

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INTERNET AVAILABILITY OF PROXY MATERIALS

      Under rules recently adopted by the Securities and Exchange Commission, we are furnishing proxy materials to our stockholders primarily via the Internet, instead of mailing printed copies of those materials to each stockholder. On September 26, 2008, we  commenced the mailing  to our stockholders (other than those who previously requested electronic or paper delivery) of a Notice of Internet Availability of Proxy Materials containing instructions on how to access our proxy materials, including our proxy statement and our annual report on Form 10-K. The Notice of Internet Availability of Proxy Materials also instructs you on how to access your proxy card to vote through the Internet or by telephone.

      This new process is designed to expedite stockholders’ receipt of proxy materials, lower the cost of the annual meeting, and help conserve natural resources. However, if you would prefer to receive printed proxy materials, please follow the instructions included in the Notice of Internet Availability of Proxy Materials. If you have previously elected to receive our proxy materials electronically, you will continue to receive these materials via e-mail unless you elect otherwise.

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PROXY STATEMENT ANNUAL MEETING OF STOCKHOLDERS OF AUTOMATIC DATA PROCESSING, INC. One ADP Boulevard · Roseland, New Jersey 07068 TO BE HELD ON NOVEMBER 11, 2008 SOLICITATION AND REVOCATION OF PROXY

      The board of directors of Automatic Data Processing, Inc. is soliciting proxies for the forthcoming Annual Meeting of Stockholders. Each stockholder has the power to revoke a proxy at any time prior to voting at the meeting by notifying in writing the company’s secretary. The company will bear all expenses in connection with this solicitation. We made this Proxy Statement and the accompanying proxy available to stockholders on or about September 26, 2008.

      The only outstanding class of securities entitled to vote at the meeting is our common stock, par value $.10 per share. At the close of business on September 12, 2008, the record date for determining stockholders entitled to notice of and to vote at the meeting, we had 509,610,473 issued and outstanding shares of common stock (excluding 129,092,196 treasury shares not entitled to vote). Each outstanding share of common stock is entitled to one vote with respect to each matter to be voted on at the meeting.

      The representation in person or by proxy of a majority of the issued and outstanding shares of stock entitled to vote at the meeting constitutes a quorum. Under our Amended and Restated Certificate of Incorporation and By-Laws and under Delaware law, abstentions and “non-votes” are counted as present in determining whether the quorum requirement is satisfied. A non-vote occurs when a nominee holding shares for a beneficial owner does not vote on a particular proposal because the nominee does not have discretionary voting power for that particular item and has not received instructions from the beneficial owner.

      The affirmative vote of the holders of a majority of the shares represented in person or by proxy and entitled to vote thereon is required to elect a director, provided that if the number of nominees exceeds the number of directors to be elected (a situation that the company does not anticipate), the directors shall be elected by the vote of a plurality of the shares represented in person or by proxy. Votes may be cast in favor of all nominees, withheld from all nominees or withheld from specifically identified nominees. Votes that are withheld will have the effect of a negative vote, provided that if the number of nominees exceeds the number of directors to be elected, withheld votes will be excluded entirely and will have no effect on the vote.

      The affirmative vote of the holders of a majority of the shares represented in person or by proxy and entitled to vote thereon is required to ( i ) approve the 2008 Omnibus Award Plan and (ii) ratify the appointment of Deloitte & Touche LLP, an independent registered public accounting firm, as the company’s independent certified public accountants. Votes may be cast in favor of or against either proposal, or a stockholder may abstain from voting on either proposal. Abstentions will have the effect of a negative vote. Brokers who do not receive voting instructions from their stockholders are entitled to vote on the election of directors and ratification of the appointment of Deloitte & Touche LLP, but not on the proposal to approve the 2008 Omnibus Award Plan. Under applicable Delaware law, a broker non-vote will have no effect on the outcome of any of the matters referred to in this proxy statement because the non-votes are not considered in determining the number of votes necessary for approval.

      Our board of directors has adopted a policy whereby stockholders’ proxies are received by our independent tabulators and the vote is certified by independent inspectors of election. Proxies and ballots identifying the vote of individual stockholders will be kept confidential from our management and directors, except as necessary to meet legal requirements in cases where stockholders request disclosure or in a contested election.

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PROPOSAL 1

ELECTION OF DIRECTORS

Our Directors

      Properly executed proxies will be voted as marked. Unmarked proxies will be voted in favor of electing the persons named below (each of whom is now a director) as directors to serve until the next Annual Meeting of Stockholders and until their successors are duly elected and qualified. If any nominee is no longer a candidate at the time of the meeting (a situation that we do not anticipate), proxies will be voted in favor of remaining nominees and may be voted for substitute nominees designated by the board of directors.

					Served as a
					Director
					Continuously
Name			Age		Since		Principal Occupation
Gregory D. Brenneman			46		2001		Chairman of CCMP Capital, a private equity firm, and Executive Chairman of Quiznos, a national quick-service restaurant chain(1)
Leslie A. Brun			56		2003		Chairman and Chief Executive Officer of Sarr Group, LLC, a private equity firm(2)
Gary C. Butler			61		1996		President and Chief Executive Officer of Automatic Data Processing, Inc.(3)
Leon G. Cooperman			65		1991		Chairman and Chief Executive Officer of Omega Advisors, Inc., an investment partnership(4)
Eric C. Fast			59		2007		President and Chief Executive Officer of Crane Co.(5)
R. Glenn Hubbard			50		2004		Dean of Columbia University’s Graduate School of Business(6)
John P. Jones			57		2005		Retired Chairman and Chief Executive Officer of Air Products and Chemicals, Inc.(7)
Frederic V. Malek			71		1978		Chairman of Thayer Capital Partners, a merchant banking firm(8)
Charles H. Noski			56		2008		Retired Vice Chairman of the Board of AT&T Corporation(9)
Sharon T. Rowlands			50		2008		Former President and Chief Executive Officer of Thomson Financial(10)
Gregory L. Summe			51		2007		Executive Chairman of PerkinElmer, Inc.(11)
Henry Taub			81		1961		Honorary Chairman(12)

____________________
 

(1)	Mr. Brenneman has been chairman of CCMP Capital and executive chairman of Quiznos since August 2008. He served as president and chief executive officer of Quiznos from January 2007 until August 2008. He has been chairman and chief executive officer of TurnWorks, Inc., a private equity firm, since April 2006, from October 2002 to July 2004 and also from May 2001 to June 2002. He was chief executive officer of Burger King Corporation from July 2004 to April 2006. Mr. Brenneman is also a director of The Home Depot, Inc.
(2)	Mr. Brun is chairman and chief executive officer of Sarr Group, LLC. He is the founder and chairman emeritus of Hamilton Lane. From 1991 until 2005 he was the chairman of Hamilton Lane. He is a trustee of Episcopal Academy in Merion, PA and the University of Buffalo Foundation, Inc. Mr. Brun is also a director of Broadridge Financial Solutions, Inc., Fortune Management, Inc. and Merck & Co., Inc.

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(3)	Mr. Butler became president and chief executive officer of the company on August 31, 2006. He was president and chief operating officer of the company from April 1998 to August 31, 2006. He is also a director of CIT Group Inc. and Liberty Mutual Holding Company, Inc.
(4)	Mr. Cooperman has been chairman and chief executive officer of Omega Advisors, Inc. since 1991.
(5)	Mr. Fast has been president and chief executive officer of Crane Co. since April 2001 and a director of Crane Co. since 1999.
(6)	Mr. Hubbard was named the dean of Columbia University’s Graduate School of Business in 2004 and has been the Russell L. Carson professor of finance and economics since 1994. Mr. Hubbard is a member of the Panel of Economic Advisers for the Congressional Budget Office. From February 2001 until March 2003 he was chairman of the U.S. Council of Economic Advisors. He is also a director of BlackRock Closed-End Funds, Capmark Financial Group, Inc., Duke Realty Corporation, Information Services Group, Inc., KKR Financial Holdings, LLC and MetLife, Inc.
(7)	Mr. Jones was chairman of Air Products and Chemicals, Inc. between December 2000 and March 2008. Between December 2000 and October 2007 he served as chief executive officer of Air Products and Chemicals, Inc. He is also a director of Sunoco, Inc.
(8)	Mr. Malek has been chairman of Thayer Capital Partners since 1992. He is also a director of CB Richard Ellis Services, Inc. and DuPont Fabros Technology, Inc.
(9)	Mr. Noski was corporate vice president and chief financial officer (December 2003 to March 2005) and director (November 2002 to May 2005) of Northrop Grumman Corporation. He served as vice chairman (July 2002 to November 2002), vice chairman and chief financial officer (February 2002 to July 2002) and senior executive vice president and chief financial officer (December 1999 to February 2002) of AT&T Corp. He is a director of Microsoft Corporation, Morgan Stanley, and Air Products and Chemicals, Inc.
(10)	Ms. Rowlands was president (from 2000) and chief executive officer and president (from 2004) of Thomson Financial until April 2008.
(11)	Mr. Summe has been executive chairman of PerkinElmer, Inc. since February 2008. Between 1999 and February 2008 he served as chairman and chief executive officer of PerkinElmer, Inc. In 2008, Mr. Summe began serving as a senior advisor to Goldman Sachs Capital Partners. Mr. Summe is a director of State Street Corporation.
(12)	Mr. Taub has been honorary chairman of our board of directors since 1986.

Stockholder Approval Required

      At the 2008 Annual Meeting of Stockholders, directors shall be elected by the affirmative vote of the holders of a majority of the shares represented in person or by proxy and entitled to vote thereon, provided that if the number of nominees exceeds the number of directors to be elected (a situation we do not anticipate), the directors shall be elected by the vote of a plurality of the shares represented in person or by proxy.

      THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR THE ELECTION OF THE NOMINEES TO THE BOARD OF DIRECTORS.

Corporate Governance

      We have a policy that requires our directors to attend the Annual Meetings of Stockholders. All of the current members of the board of directors who were elected at last year’s meeting attended our 2007 Annual Meeting of Stockholders.

      During fiscal year 2008, our board of directors held six meetings. Except for Mr. Summe, all directors attended at least 75%, in the aggregate, of the meetings of the board of directors and the committees of which they were members. Mr. Summe became a director and a member of the nominating/corporate governance committee on September 10, 2007. The board and committee meeting schedule for fiscal year 2008 had already been set, and he was unable to attend two meetings due to previously scheduled commitments.

      The board of directors’ categorical standards of director independence are consistent with applicable listing standards and are available online at www.adp.com/about_governance.asp. Directors meeting these standards are considered to be “independent.” Ms. Rowlands and Messrs. Brenneman, Brun, Cooperman, Fast, Hubbard, Jones, Malek, Noski and Summe

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meet these standards and are, therefore, considered to be independent directors. Messrs. Butler and Taub do not meet these standards and are, therefore, not considered to be independent directors. Based on the foregoing categorical standards, all current members of the audit, compensation and nominating/corporate governance committees are independent. Mr. Brun, our independent non-executive chairman of the board, is not a member of any of the board committees.

      The table below provides membership and meeting information for each of the committees of the board of directors.

							Nominating/Corporate
Name			Audit		Compensation		Governance
Gregory D. Brenneman			X (financial expert)		X (chairman)
Leon G. Cooperman			X (chairman, financial expert)
Eric C. Fast			X (financial expert)
R. Glenn Hubbard			X (financial expert)		X
John P. Jones					X		X (chairman)
Frederic V. Malek							X
Charles H. Noski(*)					X
Sharon T. Rowlands(*)							X
Gregory L. Summe							X
Meetings held in fiscal 2008			5		7		3

____________________

* Became a committee member on August 15, 2008.

      Executive sessions

      Executive sessions of the non-management directors are held during each board of directors and committee meeting. Until November 2007, the presiding director at each executive session of board of directors’ meetings would change and rotate consecutively among the independent chairpersons of the audit, compensation and nominating/corporate governance committees. Since Leslie A. Brun became our independent non-executive chairman of the board on November 13, 2007, he has presided at each such executive session of the board of directors.

      Director Nomination Process

      When the board of directors decides to recruit a new member it seeks strong candidates who, ideally, meet all of its categorical standards of director independence, and who are, preferably, senior executives of large companies who have backgrounds directly related to our technologies, markets and/or clients. Additionally, candidates should possess the following personal characteristics: (i) business community respect for his or her integrity, ethics, principles, insights and analytical ability; and (ii) ability and initiative to frame insightful questions, speak out and challenge questionable assumptions and disagree without being disagreeable. The nominating/corporate governance committee will not consider candidates who lack the foregoing personal characteristics. The nominating/corporate governance committee will also consider director candidates recommended by the stockholders. Stockholders wishing to recommend nominees for a director position should submit their recommendations in writing to the nominating/corporate governance committee in care of the company’s secretary at our principal executive offices. Candidates recommended by the stockholders will be considered using the same process and evaluation criteria as set forth above for proposed new members recruited by the board of directors.

      Retirement Policy

      The mandatory retirement age for directors is 72, except as noted below. The mandatory retirement age requirement does not apply to Mr. Taub, the company’s founder. Each director will automatically retire from the board of directors at the company’s Annual Meeting of Stockholders following the date he or she turns 72. Management directors who are no longer officers of the company are required to resign from the board of directors. However, the chief executive officer, with the board of director’s approval, may continue to serve as a director following the date he or she ceases to be our chief executive officer until the next annual meeting of stockholders and, if re-elected at such meeting, may serve one additional year.

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      Audit Committee

      The audit committee acts under a written charter, which is available online at http://www.adp.com/about_governance_audit.asp. The members of the audit committee satisfy the independence requirements of applicable listing standards. The audit committee’s principal functions are to:

• assist the board of directors in fulfilling its oversight responsibilities with respect to (i) our systems of internal controls regarding finance, accounting, legal compliance and ethical behavior, (ii) our auditing, accounting and financial reporting processes generally, (iii) our financial statements and other financial information which we provide to our stockholders, the public and others, (iv) our compliance with legal and regulatory requirements, and (v) the performance of our corporate audit department and our independent auditors;
   
• appoint, compensate, retain and oversee the work of any accounting firm preparing and issuing an audit report or performing other audit, review or attestation services for us (including resolution of disagreements between management and our independent auditors regarding financial reporting);
   
• review in advance and pre-approve all services, including fees and other terms of engagement, to be provided by our independent auditors, as permitted by applicable rules and regulations and the Auditor Independence Policy (which is discussed in further detail below under “Independent Registered Public Accounting Firm’s Fees”);
   
• review and approve disclosures required to be included in the Securities and Exchange Commission periodic reports filed under the Securities Exchange Act of 1934, as amended; and
   
• review the performance of our internal auditors and our independent auditors on at least an annual basis.

      Nominating/Corporate Governance Committee

      The nominating/corporate governance committee acts under a written charter, which is available online at http://www.adp.com/about_governance_corporate.asp. The members of the nominating/corporate governance committee satisfy the independence requirements of applicable listing standards. The principal functions of the nominating/corporate governance committee are to:

• develop policies on the size and composition of the board of directors;
   
• identify individuals qualified to become members of the board of directors and review candidates for board membership;
   
• recommend a slate of nominees to the board of directors annually;
   
• ensure that the audit, compensation and nominating/corporate governance committees of the board of directors have the benefit of qualified and experienced independent directors;
   
• review and reassess annually the adequacy of the board of directors’ corporate governance principles and recommend changes as appropriate;
   
• oversee the board of directors’ annual self-evaluation process;
   
• advise the board of directors on independence and other corporate governance matters; and
   
• review and discuss as appropriate with management disclosures relating to independence, governance and director nomination matters.

      Compensation Committee

      The compensation committee acts under a written charter, which is available online at http://www.adp.com/about_ governance_compensation.asp. The members of the compensation committee satisfy the independence requirements of applicable listing standards. In addition, each member of the compensation committee is a “Non-Employee Director” as defined in Rule 16b-3 under the Exchange Act and an “outside director” as defined in the regulations under Section 162(m) of the Internal Revenue Code of 1986, as amended. There were seven meetings of the compensation committee in fiscal year 2008, all of which involved executive sessions with no executives of the company present.

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      The compensation committee sets and administers our executive compensation program. See “Compensation Discussion and Analysis” below.

      The compensation committee is authorized to engage the services of outside advisors, experts and others to assist the committee. For fiscal year 2008, the committee sought advice from Frederic W. Cook & Co., Inc., an independent compensation consulting firm specializing in executive and director compensation.

      Communications with all interested parties

      All interested parties who wish to communicate with the board of directors, the audit committee or the non-management directors, individually or as a group, may do so by sending a detailed letter to P.O. Box 34, Roseland, New Jersey 07068, leaving a message for a return call at 973-974-5770 or sending an email to adp_audit_committee@adp.com. We will relay any such communication to the non-management director to which such communication is addressed, if applicable, or to the most appropriate committee chairperson, the chairman of the board or the full board of directors, unless, in any case, they are outside the scope of matters considered by the board of directors or duplicative of other communications previously forwarded to the board of directors. Communications to the board of directors, the non-management directors or to any individual director that relate to the company’s accounting, internal accounting controls or auditing matters are referred to the chairperson of the audit committee.

      Transactions with Related Persons

      We did not engage in any related-party transactions in fiscal year 2008.

      In June 2008, we adopted a written “Related-Person Transaction Policy” pursuant to which any transaction between ADP and a “related person” in which such related person has a direct or indirect material interest, and where the amount involved exceeds $120,000, must be submitted to our audit committee for review, approval or ratification.

      A “related person” means a director, executive officer or beneficial holder of more than 5% of the outstanding shares, or any immediate family member of the foregoing, as well as any entity at which any such person is employed, is a partner or principal (or holds a similar position), or is a beneficial owner of a 10% or greater direct or indirect equity interest. If any of our directors or executive officers is a related person, he or she must inform our general counsel at the earliest practicable time of any plan to engage in a potential related-person transaction.

      This policy requires our audit committee to be provided with full information concerning the proposed transaction, including the benefits to ADP and the related person, any alternative means by which to obtain like benefits, and terms that would prevail in a similar transaction with an unaffiliated third party. In considering whether to approve any such transaction, the audit committee will consider all relevant factors, including the nature of the interest of the related person in the transaction and whether the transaction may involve a conflict of interest.

      The policy does not apply to the following:

• transactions in which the related person’s interest derives solely from his or her service as a director of another entity that is a party to the transaction;
   
• transactions in which the related person’s interest derives solely from his or her ownership of less than 10% of the equity interest in another person (other than a general partnership interest) who is a party to the transaction;
   
• transactions in which the related person’s interest derives solely from his or her ownership of our common stock and all holders of common stock received the same benefit on a pro rata basis;
   
• compensation arrangements of any of our executive officers, other than an individual who is an immediate family member of a related person, that have been approved by the compensation committee of the board of directors;
   
• compensation arrangements of directors that have been approved by the board of directors; and
   
• transactions involving services as a bank depositary of funds, transfer agent, registrar, trustee under a trust indenture, or similar services.

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      Availability of Corporate Governance Documents

      Our Corporate Governance Principles and Related-Person Transaction Policy may be viewed online on the company’s website at www.adp.com under “Governance” in the “About ADP” section. Our Code of Business Conduct and Ethics and Code of Ethics for Principal Executive Officer and Senior Financial Officers may be found at www.adp.com under “Ethics” in the “About ADP” section. In addition, these documents are available in print to any stockholder who requests them by writing to Investor Relations at the company’s headquarters.

Compensation Committee Interlocks and Insider Participation

      Messrs. Brenneman, Hubbard, Jones and Noski are the four independent directors who sit on the compensation committee. No compensation committee member has ever been an officer of the company. During fiscal year 2008 and as of the date of this proxy statement, no compensation committee member has been an employee of the company or eligible to participate in our employee compensation programs or plans, other than the 2000 Stock Option Plan under which the non-employee directors receive option grants. None of the executive officers of the company have served on the compensation committee or on the board of directors of any entity that employed any of the compensation committee members or directors of the company.

Compensation of Non-Employee Directors

      Pursuant to our 2003 Director Stock Plan, all non-employee directors who served the entire year, other than Mr. Brun, the chairman of our board of directors, were paid an annual retainer of $105,000. $97,000 of the annual retainer was paid in the form of deferred stock units of our common stock, and $8,000 was paid in cash. Mr. Brun received an annual retainer of $200,000, of which $173,000 was paid in the form of deferred stock units of our common stock, and $27,000 was paid in cash. Ms. Rowlands and Mr. Noski, who were initially elected to the board of directors on April 30, 2008, were paid a retainer of $65,000 entirely in the form of deferred stock units. In addition, all non-employee directors were paid $2,000 in cash for each board of directors meeting attended and $1,500 in cash for each committee meeting attended. Further, the chairperson of the audit committee was paid an additional annual retainer of $10,000 in cash and the chairperson of each of the compensation committee and the nominating/corporate governance committee was paid an additional annual retainer of $5,000 in cash.

      During fiscal year 2008, the non-employee directors were entitled to participate in the 2000 Stock Option Plan. Upon initial election to the board of directors, a non-employee director receives a grant of options to purchase 5,000 shares of common stock if such director will attend a regularly scheduled board of directors meeting prior to the next Annual Meeting of Stockholders. Thereafter, a non-employee director receives an annual grant of options to purchase 5,000 shares of common stock. All options granted under this plan have a term of ten years and were granted at the fair market value of the common stock as determined by the closing price of our common stock on the New York Stock Exchange Composite Tape on the date of the grant. In November 2007, each non-employee director other than Ms. Rowlands and Mr. Noski was granted options to purchase 5,000 shares of common stock at an exercise price of $47.16 per share. Upon their initial election to the board of directors on April 30, 2008, each of Ms. Rowlands and Mr. Noski were granted options to purchase 5,000 shares of common stock at an exercise price of $44.20 per share.

      Twenty percent of all options granted prior to April 30, 2008 become exercisable on the first anniversary of the option’s grant date, and twenty percent become exercisable on each successive anniversary date thereafter until all such options become exercisable. Commencing with the April 30, 2008 grants, the options will be exercisable in four equal installments, with the first twenty-five percent becoming exercisable on the first anniversary of the option’s grant date, and the remaining three installments becoming exercisable on each successive anniversary date thereafter. The options vest only while a director is serving in such capacity, unless certain specified events occur, such as death or permanent disability, in which case the options immediately vest and become fully exercisable. In addition, non-employee directors who have been non-employee directors for at least ten years will have all of their options vested upon retirement from the board of directors and will have 36 months to exercise their options. Non-employee directors who served as non-employee directors for less than ten years when they retire or otherwise leave the board will not qualify for accelerated vesting, but will have 60 days to exercise their then vested options. Notwithstanding the foregoing, all options will expire no more than ten years from their date of grant.

      Non-employee directors elected after August 13, 1997 are not eligible to receive a pension from the company. A non-employee director attaining the age of 70 (who was a director on August 13, 1997) who retires after 20 years of service will receive an annual pension of $25,000 for the remainder of his or her life. If such non-employee director retires after having attained the age of 65 with 15 years of service, he or she will receive an annual pension of $12,500 for the remainder of his or her life.

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     The following table shows compensation for our non-employee directors for fiscal year 2008.

DIRECTOR COMPENSATION TABLE FOR FISCAL YEAR 2008

												Change in
												Pension
												Value and
												Nonqualified
			Fees Earned									Deferred		All Other
			or Paid in			Stock			Option			Compensation		Compensation(16)
Name			Cash(12) ($)			Awards(13) ($)			Awards(14) ($)			Earnings(15) ($)		($)				Total ($)
(a)			(b)			(c)			(d)			(e)		(f)				(g)
Gregory D. Brenneman(1)			$	43,000		$	97,000		$	72,390		$0		$	27,306			$	239,696
Leslie A. Brun(2)			$	51,000		$	173,000		$	75,744		$0		$	8,241			$	307,985
Leon G. Cooperman(3)			$	40,000		$	97,000		$	75,121		$0		$	27,306			$	239,427
Eric C. Fast(4)			$	20,000		$	97,000		$	15,280		$0		$	21,192			$	153,472
R. Glenn Hubbard			$	28,500		$	97,000		$	60,935		$0		$	26,457			$	212,892
John P. Jones(5)			$	40,000		$	97,000		$	54,077		$0		$	5,179			$	196,255
Ann Dibble Jordan(6)			$	3,500		$	0		$	0		$0		$	1,352			$	4,852
Frederic V. Malek			$	31,500		$	97,000		$	72,390		$0		$	7,306			$	208,196
Charles H. Noski(7)			$	4,000		$	65,000		$	2,091		$0		$	0			$	71,091
Sharon T. Rowlands(8)			$	4,000		$	65,000		$	2,091		$0		$	0			$	71,091
Gregory L. Summe(9)			$	15,000		$	97,000		$	15,280		$0		$	21,192			$	148,472
Henry Taub(10)			$	0		$	0		$	0		$0		$	60,750	(17)		$	60,750
Arthur F. Weinbach(11)			$	129,306		$	0		$	0		$0		$	20,473			$	149,778

____________________
 

(1)	Chairman of the compensation committee – $5,000 annual retainer included in fees earned.
(2)	Non-executive chairman of our board of directors since November 13, 2007.
(3)	Chairman of the audit committee – $10,000 annual retainer included in fees earned.
(4)	Mr. Fast became a director on September 10, 2007.
(5)	Chairman of the nominating/corporate governance committee – $5,000 annual retainer included in fees earned.
(6)	Ms. Jordan retired on August 9, 2007.
(7)	Mr. Noski became a director on April 30, 2008.
(8)	Ms. Rowlands became a director on April 30, 2008.
(9)	Mr. Summe became a director on September 10, 2007.
(10)	Honorary chairman of board of directors since 1986.
(11)	Mr. Weinbach served as non-executive chairman of our board of directors until November 13, 2007 and earned $129,306 in fees for this service.
(12)	Messrs. Brenneman, Brun, Cooperman, Hubbard, Jones and Malek elected to have all of their board and committee attendance fees deferred under a program that permits the directors to defer up to 100% of annual board and committee fees. Also, Ms. Rowlands and Mr. Noski elected to have their board fees deferred. A director may specify whether, upon separation from the board, he or she would like to receive the amounts in the deferred account in a lump sum payment or in a series of substantially equal annual payments over a period ranging from two to ten years.
(13)	Represents annual retainer credited in deferred stock units to a director’s annual retainer account. See “2003 Director Stock Plan” below. Amounts set forth in the Stock Awards column represent the dollar amount recognized for financial statement reporting purposes for fiscal year 2008 as computed in accordance with Statement of Financial Accounting Standards No. 123(R). For the methodology of how the SFAS 123R amount is calculated, please see Note 13 to our audited consolidated financial statements for the fiscal year ended June 30, 2008 included in our annual report on Form 10-K for the fiscal year ended June 30, 2008. See “Director Outstanding Deferred Stock Units” table below for the number of outstanding deferred stock units at fiscal year-end and grant date fair value for each director (which information has been adjusted to reflect the spin-off of our former Brokerage Services Group business on March 30, 2007).

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(14)	Amounts set forth in the Option Awards column represent the dollar amount recognized for financial statement reporting purposes for fiscal year 2008 as computed in accordance with SFAS 123R, disregarding estimates of forfeitures related to service-based vesting conditions. For the methodology of how SFAS 123R amount is calculated, please see Note 13 to our audited consolidated financial statements for the fiscal year ended June 30, 2008 included in our annual report on Form 10-K for the fiscal year ended June 30, 2008. See “Director Outstanding Options” table below for additional information on option awards outstanding at June 30, 2008 (which information has been adjusted to reflect the spin-off of our former Brokerage Services Group business on March 30, 2007).
(15)	Reflects the aggregate increase in the present value of the pension benefit. Non-employee directors who joined the board after August 13, 1997 are not eligible to receive this benefit. The present value as of June 30, 2007 is determined based on a discount rate of 6.25% and the GATT-2003 mortality table. The present value as of June 30, 2008 is determined based on a discount rate of 6.95% and the RP-2000 white collar mortality table (projected to 2008). The change in the present value of pension benefit for Mr. Cooperman was negative $1,638; Ms. Jordan was negative $18,232; and Mr. Malek was negative $21,911. We reflected $0 for these negative amounts.
(16)	Reflects payment of dividend equivalents on deferred stock units for each director in the following amounts: Mr. Brenneman, $7,306; Mr. Brun, $8,241; Mr. Cooperman, $7,306; Mr. Fast, $1,192; Mr. Hubbard, $6,457; Mr. Jones, $5,179; Ms. Jordan, $1,352; Mr. Malek, $7,306; Mr. Summe, $1,192 and Mr. Weinbach, $673. Also includes contributions by the ADP Foundation that match the charitable gifts made by our directors in the following amounts: $20,000 each for Messrs. Brenneman, Cooperman, Fast, Hubbard and Summe, and $19,800 for Mr. Weinbach. The ADP Foundation makes matching charitable contributions in an amount not to exceed $20,000 in a calendar year in respect of any given director’s charitable contributions for that charitable year.
(17)	Reflects a $50,000 salary earned as an employee, and use of a car leased by the company with an aggregate incremental cost to the company of $10,750.

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Director Outstanding Deferred Stock Units

					Number of  Deferred			Grant Date
Name			Grant Date		Stock Units			Fair Market Value
Gregory D. Brenneman			11/13/2003		1,538			$	55,000
			11/11/2004		1,344			$	55,000
			11/10/2005		1,534