After Scandal, New State Law Orders Industry-Serving Payroll Study

0


ALBANY — Gov. Kathy Hochul, citing the local payroll scandal that has rocked the region and national businesses, signed legislation Friday that will study the health of the industry and its impact on consumers.

The new law requires the state Department of Financial Services to study the payroll services industry, following the MyPayrollHR scandal that caused major financial disruption for workers and small businesses, Hochul’s office said.

The agency, in conjunction with the Department of Revenue, will review insurance or other risk-mitigation tools and third-party payroll companies providing such services “to ensure the health of the industry and the existence of protections sufficient for consumers. The Superintendent of Financial Services will submit a report of findings and recommendations to the Governor, the Provisional President of the Senate and the Speaker of the Assembly, according to Hochul.

Michael Mann, who ran Clifton Park-based processing company MyPayrollHR, was convicted in 2020 of defrauding Pioneer Bank and others out of more than $100 million in a fraudulent scheme that began to unfold around Labor Day 2019. This led to the collapse of MyPayrollHR. and left thousands of workers across the country without a paycheck. He has been accused of misappropriating payroll deductions from his clients for his own use on several occasions.

After pleading guilty to the scheme, the former Edinburgh man was sentenced last fall to a 12-year federal prison term. The case also sparked a number of lawsuits.

“Workers and small business owners in New York City have been devastated by the collapse of MyPayrollHR and it’s crucial that we have all the information to understand what led to this crisis,” Hochul said. in a press release. “The first step in any process is to gather all the information about what is happening and use that data to create a plan moving forward and that is exactly what this legislation will do.”

The hopes are that the study will be a “first step in looking at this incident and seeing what possible prevention techniques may exist”.

In light of the scandal, sponsor of the state senate bill, Neil D. Breslin, said it became clear that the state needed to examine the payroll service provider industry to determine what additional consumer protections needed to be put in place to ensure such a situation did not happen again.

“Three years ago we watched in horror as a payroll company steal tens of millions of dollars from New York businesses and employees,” said Assemblyman Kevin A. Cahill, who sponsored the bill in his room. “Families couldn’t even figure out how to pay their rent and bills because their wages couldn’t be found and their employers didn’t replace the missing funds. We want to make sure no family has to deal with this. ”


Source link

Share.

Comments are closed.