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New state bills come forward in NY after MyPayrollHR shuts down

September 20, 2019

The New York State Senate introduced legislation on Wednesday in response to the recent shutdown of MyPayrollHR. The bills proposed putting criminal penalties in place for payroll firms that misappropriate payroll funds and other things.

MyPayrollHR’s sudden closure left thousands in New York without pay, and temporary workers were among those affected, according to media reports. It has also garnered the attention of law enforcement. CBS reported on Tuesday that the home of MyPayrollHR’s CEO Michael Mann in upstate New York was searched by the FBI amid allegations his company diverted an estimated $35 million from employee pay.

“The abrupt closure of MyPayrollHR has left thousands of workers across New York and the United States without pay and has severely damaged our confidence in the entire payroll industry,” New York Senate Majority Leader Andrea Stewart-Cousins said in a statement.

Several bills are included among the legislation put forward.

One bill would create criminal penalties for intentionally misappropriating payroll and payroll tax funds; it would also hold companies criminally liable.

Another would make payroll processing companies responsible for paying up to three times the value of a paycheck if an employee misses a paycheck. 

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