Payroll Problems at EY

[Lee B]

"Ernst & Young employees in the U.S. were upset Tuesday to discover their paycheck deposits from last Friday had been reversed after a glitch at its payroll processing company ADP.

In some cases, the problems may have led to overdrafts on some EY U.S. employees’ bank accounts. “Our payroll vendor erroneously reversed EY’s July 15 payroll impacting our US employees and we are urgently working with them to correct the error,” said a spokesperson for the firm in an email to Accounting Today. “Late fees, penalties or other charges they may have incurred as a result of this error will be covered.”

ADP confirmed the problem originated in its system. “We can confirm that we experienced an error that caused a payment reversal for a group of U.S. employees of one of our clients,” said a statement from ADP. “We understand the urgency of this issue and our team is working swiftly to resolve this to ensure employees receive their pay as quickly as possible.

Later in the day, on Tuesday afternoon, an ADP spokesperson said the problem has been resolved: “As an update, we have resolved the error and have completed processing with our banking partners. All transactions are expected to process by end of business day today. Availability of funds is dependent on each employee's personal banking provider.”

The problems affected approximately 55,000 EY employees in the U.S., according to the Financial Times.

Late in the day, after the fix was announced, some employees said they were
still experiencing problems, while some reported they had been paid double."

Well that will remove some of the glitter from ADP's image.

[Medlin Software, Dennis]

Yikes.

Employers are ultimately liable as they cannot third party their liability away.

Both the employees and employers will spend some likely uncompensated time investigating and resolving. It is one of the risks of using a third party. 

[Medlin Software, Dennis]

Employers can also be at risk of they allow DD to something other than an account only their employee controls. (Not something most consider until a second person gets the wages and the employee says they were not paid.)

[ILLMAS]

Funny how people who receive more usually don't complain.

[JohnH]

On 7/21/2022 at 10:58 AM, ILLMAS said:

Funny how people who receive more usually don't complain.

Reminds me of the story about when the textile mills used to pay everyone weekly, in cash.  One week John opened his envelope, then turned to the paymaster and complained his envelope was $2 short.  The paymaster responded, "Yes, last week I overpaid you by $2, so I just deducted it this week."  John nodded and walked away.

The paymaster then called John back and said, "I could tell by your reaction you knew about the $2 overpayment.  Why didn't you mention it last week?"

John replied, "Well, I'm a reasonable man. I'm inclined to let it pass if a fellow makes a mistake. But when he messes up two times in a row, it needs to be called to somebody's attention."

[Medlin Software, Dennis]

I get asked, really, if it is acceptable to pay in cash.  I suggest it is a good idea to be prepared to pay in cash, in case they have no power or have some other issue where checks or other electronic means are not available.  While rare, this does happen.  Or, to be ready to cut some checks using the prior figures, or give some sort of flat amount, to get employees something for a few days.