Don’t let This Happen to Your Business:
September 12, 2019
FBI investigates payroll company accused of stiffing $35M from small businesses…
The FBI and the New York State Department of Labor confirmed this week they are investigating allegations that a widely-used payroll company diverted nearly $35 million in employee pay to its own bank account before abruptly closing up shop, leaving more than 250,000 employees across the country without paychecks.
According to authorities, MyPayrollHR, based in Clifton Park, N.Y., shut down last week after direct-deposit company Cachet Financial Services accused it of moving $26 million from small-business employee paychecks to one of its own bank accounts. Most payroll companies have this capability to transfer funds to the bank accounts they want the funds to land. In additional most payroll companies have their own escrow account setup to collect escrowed taxes which earn them interest income.
Choosing A Payroll Company to Safeguard that this does not happen to your business and your employees:
The issue from above could have been avoided if the Payroll processor did not have the power to direct funds to the processor’s own account or to even have control over the tax escrow account.
Why choose Greentree Accounting & Tax Services for all your payroll processing and HR functions.
All three of these layers are compliant with strict federal and state government regulations and annual audits. It is a failsafe model due from separating processes and approvals from the other two parties.
Note: Greentree Accounting escrows the employer’s taxes through the intermediary, the software company’s, escrow account at an independent banking financial institution.
So Greentree Accounting only has the ability to move the funds when due to designated taxing authorities via the setup of the payroll software.