The MyPayrollHR Collapse
Quinn: It’s 1-800-LAW-1010, 1800law1010.com, Paul Harding from Martin, Harding & Mazzotti on the horn.
Cantara: Hey, Paul.
Paul: Hey. Good morning, guys.
Quinn: I can use the word horn with you, right, Paul?
Paul: Yeah. Yeah.
Quinn: Steve Martin made fun of it.
Cantara: Even Steve Martin thought the term was old.
Quinn: Come on.
Cantara: You know, it doesn’t sound any younger to say telephone.
Quinn: Yeah, right?
Paul: No, it doesn’t.
Cantara: Paul, you at a payphone this morning? Paul’s on his bag phone.
Quinn: Yeah, it’s like, “I have to Facetime or I’m uncool.”
Paul: [inaudible 00:00:28].
Quinn: So we’re talking about this…
Cantara: MyPayrollHR, which I think is a Clifton Park company, but they’ve essentially diverted $35 million from employee accounts. It’s a payroll company.
Quinn: They put it all into one bank or something. Didn’t they, Paul? It’s crazy. What’s going on with this story?
Paul: So when this thing hit, you know, I happened to be in Cooperstown of all things, and I was with a group of people. And it was like a movie, everybody’s phone was clicking, and everybody knew about the story, and everybody was talking about the story. Everyone knew someone who either worked there or was a part of management. And so I kind of got onto it a little bit late, but yeah, it just hasn’t happened here in essence. You know, we as employers, we kind of take our money and we give it to these groups to write payroll, because payrolls and HR are tricky things. And so we don’t do it in-house, we have a group do it. There’s so many of them out there. But this one failed, right? This one just gave the money to employees and then pulled the money back. And so what we have here is a bunch of questions and very few answers as to what happened.
Cantara: Who does oversight of payroll companies? Is that a government thing?
Paul: It is. So you’ve got the federal government, any time money’s being transferred, you know, that they kind of are involved in money transferred, and then the state also has a group that supervises this. But you know, I guess what we’re finding… And again, a lot of this, it’s kind of unique how it’s more of a community talk than it is directly from the media. You know, the media, it’s careful and wants to be responsible. But you know, it’s kind of just saying, “Hey, the FBI is looking at this. We know that the state’s looking at this.”
Quinn: What was your gut? My gut was was like, hey, these guys are about to file bankruptcy, so the company or its advisors said, “Get all of your liquid assets in one place.” Did that, you know, pop in your head when you saw the story originally, or no?
Paul: You know, exactly so. I’ve heard all about that. When you look at this though, again, they’re just sort of a clearing house. Like, they sort of get the money, and then they sort of give the money back. And then they take a very very small percentage of it. I mean, it’s super cheap when you have a payroll company, which is why we all have one. So you know, the banks, when they dig into this, and I know they are, they’re going to find that there’s been something going on that is just a little bit darker, a little bit deeper than that, is my guess. You know, there’d have been a couple bad weeks, and then some plan to file bankruptcy. You still can’t do that, because it’s not your money. Again, they’re taking other people’s money and then redistributing it to their employees. So yeah, and the money’s still being held, right? So that’s the part that, now I’m told and I thought, “No, there’s no way that it could be held for months, and months, and months. Just release what you can and the deficiency would remain out there.” But the money that was taken back from these folks who just had their paycheck in their account and it was gone the next hour.
Quinn: What if there’s some big crazy like extortion scam from another country, or…?
Cantara: I’m just worried about the guy going to work every week. Did he not get paid?
Paul: Yeah. He did not get paid unless his employer somehow had the extra cash to make, in essence, a double payment. Right? So he paid the payroll company, the payroll company did not pay the employee, and now the employee either got paid again or not get paid. And you know, most businesses run kind of tight, so we don’t know that.
Cantara: Maybe he just wanted to take it and just play a little roulette with the lump sum, see if he could fix it.
Paul: Put it on black, yeah. Black roulette, yeah.
Cantara: Twenty-two black.
Quinn: It’s a local story, because it’s Clifton Park, but it’s really more of a national story, or at least a regional story.
Paul: Yeah, it sure is.
Quinn: It’s crazy. So I bet everybody looked at their paychecks this week, whether you use them or not. I guess we wait and follow up on this story as we hear more, right, Paul?
Paul: Yeah, in the old days, they’d hand you a paycheck on Friday and you’d march to the bank, and… Boy, you know, although that had some potential for trouble, nothing like this.
Cantara: Yeah, but I had to go to the bank.
Quinn: That is a drive.
Cantara: You know what I mean?
Quinn: Yeah, the drive-up bank, right? You never go in that place, do you?
Cantara: Paul Harding from Martin, Harding & Mazzotti. 1-800-LAW-1010 and 1800law1010.com.
Together: Thanks, Paul.
Paul: All right, guys. Talk soon.