Employees Left High and Dry by Sudden Shutdown of National Payroll Company - NBC Southern California

Employees Left High and Dry by Sudden Shutdown of National Payroll Company

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    NEWSLETTERS

    National Payroll Company Shuts Down on Payday

    NBC 7's Dave Summers spoke with employees of one of thousands of companies the payroll firm served. They say their direct deposits were taken out of their bank accounts not once, but twice. (Published Friday, Sept. 6, 2019)

    Employees of local companies that utlize a nationwide payroll company were left scratching their heads on payday after the third-party payroll firm's sudden shutdown.

    The last 24 hours have a been a nightmare for employees at Shafran Reality Group in Carlsbad. Its 15 employees got paychecks, but the money was taken back out of their accounts electronically -- not once, but twice.

    The shuffling of funds coincided with the sudden shutdown of MyPayrollHR, the firm that served Shafran and some 4,000 other companies.

    Olivia Braund works hard for her money at Shafran, but when she needed it most, her money disappeared.

    “The company had taken the funds out, but without my permission,” Braun said.

    Shafran’s owner, Alan Shafran, said he was paid by direct deposit, then the money was withdrawn the same way. He told NBC 7 he was stressed and was “freaking out.”

    Shafran showed a notice he received from MyPayrollHR Thursday morning. It indicated the bank froze a non-payroll account of MyPayrollHR’s parent company Value Wise and they're working to correct it.

    Braun said she and her coworkers figured it was all a mishap at first. But seven hours later, in a second email from MyPayrollHR Shafran was told to find another payroll processor and to be prepared to reimburse those who had money withdrawn.

    He said he paid his employees out of his own pocket for the lost wages, but then the same thing happened the next day.

    “The exact same amount has been taken back out again."

    Value Wise Corporation took down its website and did not answer calls from NBC 7. Messages left with MyPayrollHR were not returned.

    Shafran has a message for other companies and their employees that use third-party payroll services.

    "If you have a bank account that has direct deposit or withdrawal, we may be a lot more vulnerable then we realize,” he said.

    Shafran says his company is one of at least three North County businesses affected by this shutdown. The other two have not yet been identified.

    He says his bank and those of his employees are treating the payroll company's actions as fraud.

    Victims formed a closed Facebook Group called MyPayrollHR which grew to over 800 members almost overnight.