Rindge’s Hometown Diner hit hard by payroll company closure

  • Bonnie Rosengrant, owner of the Hometown Diner in Rindge, and manager Crystal Brooks chat with diner patron Charlie Smigelski of Groton. Staff photo by Ashley Saari—

  • Bonnie Rosengrant, owner of the Hometown Diner in Rindge, and manager Crystal Brooks chat with diner patron Charlie Smigelski of Groton. Staff photo by Ashley Saari—

  • Manager of the Hometown Diner Crystal Brooks, one of thousands of employees impacted by the shutdown of a New York-based payroll company, enters a customer's order. Staff photo by Ashley Saari—

  • Hometown Diner owner Bonnie Rosengrant and manager Crystal Brooks in front of the Rindge business, which was one of 4,000 nationwide impacted when a New York-based payroll company abruptly shut its doors with no notice to its customers. Staff photo by Ashley Saari—

Monadnock Ledger-Transcript
Published: 9/11/2019 5:38:48 PM

Employees of the Hometown Diner in Rindge are among thousands nationwide who have been impacted by the swift shutdown of a New York payroll processing company, which closed without any notice to its clients last week, and without issuing the employee’s paychecks.

“I’m so beside myself, I can’t think straight anymore. I’m just spinning,” Hometown Diner owner Bonnie Rosengrant said Tuesday, after spending a week calling accountants and banks, and tracking down a new payroll processor to ensure her employees are paid on time this week.

She is also continuing to pursue the payroll company for the deposit she made Sept. 1 for the paychecks that never arrived.

Thursday is payday for the employees of the Hometown Diner. Rosengrant processed her payroll for her 23 employees and deposited the payments as usual on Sept. 1. She expected no problems. However, when payday rolled around on Thursday her employees didn’t receive their checks. That same day, she received an email from her payroll processing company, MyPayrollHR, informing her she’d need to find another company to perform the service.

The email bluntly stated: “We regret to inform you that due to unforeseen circumstances, we are no longer able to process any further payroll transactions,” and advised Rosengrant to find a new company.

While a follow-up email from MyPayroll HR on Friday said the company was working with banking partners to release funds in transit, Rosengrant said her deposit still hasn’t been returned.

Rosengrant said she was able to pay her employees Tuesday from a cash reserve, but it cost about $20,000 to do so. And she’s not sure if she’ll get that money back.

“I don’t even know where to start to fight this. If this is never resolved, it’s a huge hit for us. And we are fortunate in that we had that reserve,” Rosengrant said. “A lot of places don’t, especially small businesses.”

She’s not the only one looking for answers. Williams Construction in Keene also used the payroll service to pay its nine employees.

“We’ve been using them since 2014, and had zero problems with them. We’ve had no trouble … until last Thursday,” Williams Construction Office Administrator Bill Williams said. “It was really a shock.”

Williams said employees who receive direct deposit reported their paycheck had been withdrawn from their account, not just once, but twice. Some have filed complaints with their banks and gotten money back, but not all yet.

“The double reversal put some of them into a negative balance,” Williams said. “It really got them.”

Crystal Brooks of Winchendon, the general manager of the Hometown Diner, said she also had employees go into the red.

“People live paycheck to paycheck. For some people, losing $50 would be as bad as losing $50,000 for someone else,” Brooks said. “A week’s pay is huge. It’s stressful. The good part is, we’re small enough we can help each other out.”

Brooks said the Hometown Diner has been lucky – employees haven’t been hit by multiple withdrawals, and their banks have been responsive in helping them put stops on their accounts and by waiving fees. But dealing with the fallout has taken a lot of legwork and phone calls to make sure everyone’s whole, she said.

“Even if it’s fixed and all resolved in two weeks, it’ll have been two weeks of hell for everyone from the employer, to the employee who’s just trying to feed their kids,” Brooks said.

“It consumes you,” agreed Rosengrant. “You don’t sleep. My stomach has been in nothing but knots.”

Both Williams Construction and Hometown Diner cut their employees checks to cover last week’s pay, and are tracking down new payroll companies. But they’re also still grappling with the impact of the downfall of MyPayrollHR.

For example, neither company knows if their payroll taxes – something which would have been processed through MyPayrollHR – have been paid. Those taxes are filed quarterly, and could be a significant amount.

The physical offices for MyPayrollHR, located in New York, have reportedly shuttered, and customers attempting to reach their service department are left with no one to answer their questions.

“They’re not there anymore, no one’s picking up the phone, they’re not answering their emails anymore,” Williams said.

Rosengrant said the timing was particularly hard for employees, coming just after the first of the month when rent and bills often come due. She was able to pay her employees on Tuesday, five days after payday, which meant she had to give cash to some employees before that so that they could afford basic expenses such as gas to get to work.

New York Governor Andrew Cuomo has called for an investigation of MyPayrollHR by the Department of Financial Services, calling its shutdown and stranding of customers “disturbing and completely unacceptable” in a statement released Friday.

“Its reckless actions have left employees across the state and the nation with negative bank accounts and forced businesses who depend on its payroll services to scramble to find ways to compensate their employees,” Cuomo said in the statement.

Ashley Saari can be reached at 924-7172 ext. 244 or asaari@ledgertranscript.com. She’s on Twitter @AshleySaariMLT.


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