Employees still without pay amid MyPayrollHR closure
September 10, 2019 02:30 PM
Thousands of people are starting the week strapped for cash. Deposited paychecks were withdrawn from their accounts last week after Clifton Park based payroll company, MyPayrollHR abruptly closed, leaving 4,000 employers scrambling.
Governor Andrew Cuomo has since called on the Department of Financial Services to investigate. Officials with the Better Business Bureau of Upstate New York are also asking affected employees to file claims.
NewsChannel 13 reached out to DFS Monday morning to find out how many employees were affected, how much money is missing from those employees' bank accounts and whether they're expected to be made whole. No one returned our request for comment.
An article on Nevada-based website nvtip.com said Cachet Financial Services was defrauded by a New York based payroll company on September 4, though the article did not name MyPayrollHR specifically. It did name Pioneer Savings Bank as the payroll provider's bank. A public relations representative for Pioneer Savings Bank said they could not comment at this time, but plan to give an update on the legal matter later this week. The article said the exposure amount is estimated to be up to $26M.
One employee in Troy that was affected by the payroll company closure said she first noticed her account was overdrawn on Thursday. Her paycheck had been deposited by Cachet Banq, but exact amount was withdrawn by ValueWise Corporation later that same day. She said she was able to call Bank of America to get it reversed, only to have the same thing happen again on Friday. Fortunately, she has been able to get all of her money back, but others haven't been as lucky.
In fact, an Instagram post from Troy restaurant The Shop linked to a Times Union article that reported the entire staff has resigned because of how the owner dealt with the payroll issue. Though the article also said employees claim the owner was largely absent and there were communication issues leading up to the payroll issue.
NewsChannel 13 spoke with someone at The Shop who said they are still open and have found a new payroll company. Many other Capital Region businesses are also doing the same.
NewsChannel 13 spoke with Guy Maddalone, founder and CEO of GTM Payroll Services in Clifton Park on Monday. Maddalone said it's been a busy couple of days for his staff.
"We also were open all weekend and we received some telephone calls there and then today we actually received some more phone calls from not just those people but also the accounting professionals that are in the Capital Region that already refer business to us," Maddalone said. "They wanted to check in with us to make sure that we were still able to take some clients on but also to give them a little bit more information on how they can address this with their clients."
Maddalone said there are a few things employers should keep an eye out for when choosing a payroll service. He said it's important that the company gives details on their employees' background, their experience in the area, their accreditations or voluntary audits to prove they're conducting business appropriately. He said employers should also ask if the company own the space where they're working.
"Here at GTM we own two pieces of property, 23,000-square-feet, that our 70 employees actually work in day-to-day. We have a very strong balance sheet so we can support any scrutiny that there might be to our organization when we're trying to do financial data transactions for those clients that are asking us to do that," Maddalone said.
Over 1,800 people affected by the closure have joined a Facebook group to air their grievances and to get advice.
On Monday, someone posted a poll asking other members where they were in the process of getting their money back. Most people said they still haven't been able to get their banks to refund the money. Many employers said the same.
Maddalone said employers will likely be responsible for repaying their employees because they're the ones who decided to go into business with a company that folded. He said he's even hired additional staff to help with the influx of clients they're seeing as a result of MyPayrollHR's closure.
"A lot of these employers just need to figure out how to get back on their feet as soon as possible. We realize that they are trying to make their employees whole and cash flow is likely an issue," Maddalone said. "So we will do some things to try and help them to get by this rough patch in the event that they decide to come to GTM."
In addition to paying employee's wages, employers may also have to pay back taxes that the payroll company could have evaded.
At this point, it's not clear what happened to all the money, but one local attorney who has experience working on payroll issues said it will likely take years for state and federal officials to investigate.
NewsChannel 13 will continue to bring you new developments relating to this story both on-air and online.
Updated: September 10, 2019 02:30 PM
Created: September 09, 2019 06:23 PM
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