Mistakes continue to plague payrolls, Employee tax forms Oakland's latest woe

February 08, 2000

By Kathleen Kirkwood, STAFF WRITER

OAKLAND -- The rest of the world seems to have survived the Year 2000 bug with few side effects, but city payroll officials in Oakland can't seem to shake it.

Two months into the new year, incorrect W-2 tax forms have cropped up as the latest glitch resulting from the city's changeover to a new Y2K-compliant payroll system.

The city is recalling 1,000 W-2s from among its 5,600 workers after running a check for errors, Assistant City Manager Dolores Blanchard said Monday.

Many of the mistakes occurred when income was "miscategorized," overstating an employee's taxable wages, she said.

In the Police Department, where recent payroll glitches under the new system seem to have occurred more frequently than elsewhere, 170 officers were affected by the latest snafu.

Representatives of the Oakland Police Officers Association blame the city's $22 million Oracle computer system for the problems, and say the city should return to its former Legacy system.

"It's endemic to this new system, which they say is wonderful," said Tom Viglienzone, a police officer who is treasurer for Oakland Police Officers Association. One police officer has already gotten back a refund from the IRS, having filed his taxes early, only to find his name on the list of those with errors, Viglienzone said.

The W-2 problems in the Police Department include reporting deferred compensation that was incorrectly added to taxable income, he said. Many staffers also found that their W-2 form accounted for both missed and supplemental checks.

Blanchard said city officials hadn't arrived at the crux of the problem, but said it could have resulted from having part of the payroll on one computer system and part on another. When the information was converted, errors could have occurred, she said.

Problems have plagued the city every payday since Nov. 18, when the new system was first launched. Some employees received no check at all, some got as low as 1 cent, while another received a $322,000 check for two weeks' work.

Representatives of three unions are now suing the city, demanding interest for pay that didn't arrive on time -- even if it was issued in supplemental checks.

Their lawsuit is based on the federal Fair Labor Standards Act, which states that employees must be paid on time what is due them, including overtime.

The 9th U.S. Circuit Court of Appeals has ruled that if there is a late paycheck, no matter what the reason, then the employee is entitled to "liquidated damages" and interest.

So far, several hundred employees have joined the suit.

City officials, in a report that will be considered by a City Council committee next week, maintain a normal error rate for payroll is 3 percent.

Since Nov. 18, when the new system was first used, the error rate has been 5 percent to 6 percent, according to Dolores Blanchard.

The city has notified employees with W-2 errors, Blanchard said. Those who return them will receive corrected forms.

STAFF WRITER Harry Harris contributed to this report.

Source: The San Bernardino Sun Archive #137493, California

http://www.newschoice.com/Newspapers/Gannett/Sun/default.asp

-- Lee Maloney (leemaloney@hotmail.com), February 17, 2000