Y2K may delay some payrolls

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Y2K may delay some payrolls

Thursday, April 29, 1999


Staff Writer

Paychecks and benefits for many employees may be delayed after the new year as a result of year 2000 computer problems, a survey released Wednesday found.

The poll, by the Philadelphia-based consulting firm Towers Perrin, found that nearly three out of four companies have not completed year 2000 testing of their human-resource systems. Of those, one in three isn't even halfway there yet.

The year 2000 computer problem is the result of many computers' inability to recognize dates after Dec. 31. Some say misinterpreting those dates will cause some computers to fail.

Tom Keebler, a Towers Perrin principal who conducted the survey, said the lack of preparedness in repairing human-resource systems is cause for concern.

"There are a lot of employers who are still behind the curve," he said. "Having something completed in a December time frame is cutting it very close."

The survey of 80 firms, which collectively employ more than 2 million workers, found that the computers that control human-resource functions at 27 percent of the firms already are Y2K compliant, with all necessary repairs completed and tested.

Twenty-eight percent of the companies surveyed said they plan to be Y2K compliant by June 30, while 34 percent said they'd be ready by Sept. 30 and 11 percent said they'd be ready by Dec. 31.

Keebler said those target completion dates represent company "estimates," and that those who fail to meet the Dec. 31 deadline could find themselves unable to issue checks or coordinate employee benefits in the first weeks or months of the new millennium.

Beyond the issue of employee payroll, Keebler said companies that are not ready by Jan. 1 run the risk of causing problems for "downstream" computers that rely on payroll data, such as those used by insurance companies and fund managers for 401(k) plans.

"It's definitely not a cause for panic," he said. "But it is definitely a concern as far as how much attention companies are paying to the tradionally more behind-the-scenes systems like payroll."

Kerry Gerontianos, president of Incremax Technologies, a New York software services company that helps businesses resolve Y2K problems, said small companies that don't outsource payroll functions to other companies are much more vulnerable to Y2K disruptions than the large companies surveyed by Towers Perrin.

Gerontianos, who has been conducting a nationwide series of seminars on the impact of Y2K on small businesses, said many of those companies could wind up writing payroll checks by hand.

"We see a very sharp divide," he said. "While they're not 100 percent ready, [large companies] will all be where they should be by the turn of the century. Small businesses look at this as a non-issue. Could there be problems? Absolutely. There are probably some companies that haven't started thinking about it."

With eight months to go, corporations, public utilities, and government agencies are struggling to resolve their Y2K problems in time. The cost of the repairs and the lawsuits expected to follow is estimated to top $1 trillion.

Officials say the date change will result in only minor inconveniences but are taking steps to prepare for the worst. Among them: adding $50 billion to the nation's money supply in anticipation of bank runs triggered by fears about computer problems making it impossible for people to obtain or cash their paychecks.

Copyright ) 1999 Bergen Record Corp.


-- Gayla Dunbar (privacy@please.com), April 30, 1999


Today is payday for me and some of the other 60,000 employees for the company that I work. I have been on direct-deposit for three years without any problems. Just like every other Friday, I checked my mail today for my paycheck stub indicating my check had been deposited directly into my bank account. I opened it up and began to tear off the "check" portion of the stub that normally states, "Your entire paycheck in the net amount $XXXX has been deposited in your account #XXXXXX. I did a double-take and realized that it was an actual "live" check for my salary.

I contacted my corporate payroll department and was told by the corporate payroll coordinator that there was a "glitch" with the payroll run on 04/30/1999. She further explained that all of the paychecks had actually been direct deposited into our accounts as usual but the computer glitch also sent out printed checks as well. She advised me to contact my bank and verify that my payroll had been deposited correctly. She told me that a "bulk" stop-payment order had been issued on all those printed checks (must of cost some money to do that!). She told me that I should write "void" on the printed check. She didn't say it was related to Y2K but I have my suspicions as the company is currently working on remediation and testing.

On another note, I received a letter from FedEx today stating that their software I installed two years ago (used to schedule pick-ups, print shipping labels, tracking packages, etc.) is not year 2000 compliant. The letter stated that I could download an upgrade from their web site to fix the problem. It also stated that all software must be upgraded to be Year 2000 compliant by 5/31/1999 because after that the old software would "expire" and would not be accepted into their system. They also offered a $10.00 discount off our next shipment for doing the upgrade.

And while I'm at it, my mortgage company sent me two statements for the month of April.

It seems more and more companies and the government are getting closer to compliance. With all of the positive media spin and lack of Y2K failures thus far, coupled with the experiences I mentioned above, I begin to wonder if these glitches are typical of the Y2K problems I'll experience after rollover. If this is the magnitude of the glitches, I can live with the annoyances and inconveniences. I have begun to doubt whether the extent of my preparations are warranted. Is it beginning to look more and more like a "bump in the road?"

-- Angelface (lurking@around.com), April 30, 1999.

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