January 14, 2020: Senate Response to myPayrollHR crisis

The State Senate is getting the ball rolling on a package of bills drafted in response to the abrupt shutdown of MyPayrollHR in September that left thousands of people around the country with overdrawn bank accounts.

The bills, which have begun moving through the chamber’s committee process, create new penalties for misusing payroll funds, enable victims to recoup lost funds and require a state study of the payroll services industry. Sen. Kevin Thomas, a Long Island Democrat, who chairs the Senate Consumer Protection Committee is “hoping” a floor vote will be held next week.

“If central staff is listening to this, let’s do it for next week,” Thomas told the Capitol Pressroom Tuesday.

According to federal authorities, last year millions of dollars that were supposed to be distributed by MyPayrollHR, a Capital Region payroll company, were instead redirected by the company’s president, Michael Mann, into his personal account.

Subsequently, people all over the country, whose employers relied on MyPayrollHR and used direct deposit, found their most recent paycheck withdrawn from their accounts and some reported a second deduction by the middleman utilized by MyPayrollHR to actually deliver paychecks. In some cases employees had negative account balances or lacked sufficient funds to pay their bills.

Thomas said the industry hasn’t been properly regulated in the past and requires more oversight. His bill, which he believes is a deterrent, would impose treble damages on payroll companies or businesses that handle payroll if an employee misses a paycheck because of a failure by the entity handling payroll.

While Thomas said he tried to account for the interests of the payroll industry in crating his bill, he acknowledged that the feedback has not been positive from the potentially effected businesses that don’t want the status quo changed. “They obviously are not happy,” he said.