New York’s investigation into payroll processing companies could result in new rules for the industry, the state’s top financial regulator said.
New York Superintendent of Financial Services Linda Lacewell said in a radio interview Wednesday that her agency was “getting into the last phase” of an investigation into the payroll processing companies. New York Gov. Andrew Cuomo (D) ordered the DFS to conduct an investigation into the payroll processing industry after the September collapse of MyPayrollHR, a New York-based company. The collapse resulted in thousands of employees at hundreds of companies losing around $30 million in wages. The state’s attorney general is also looking into that company’s failure and a criminal investigation is ongoing.
While Lacewell did not say whether the investigation would result in any enforcement actions, she said that her agency would look to find ways to “reform the industry and how do we prevent these kinds of incidents again” in an appearance on “The Capitol Pressroom,” an Albany, N.Y. public affairs program. Lacewell added that the DFS has had cooperation from “most” of the payroll processing companies they’ve contacted.
New York is also conducting a separate investigation into early wage access companies, which allow employees to access their wages before payday, alongside financial regulators from 10 other states and Puerto Rico.
Eyes on Privacy
Payroll processing and early wage access are not the only industries that could come under DFS supervision. Lacewell said she also has her eyes on data privacy regulations as well. “I know there’s an appetite to do something about it. It requires some very smart people to think this through,” she said.
Legislation along the lines of the California Consumer Privacy Act, which went into effect this year, is pending in the New York State Senate. While Lacewell did not say whether she supports the bill, she said that her agency was studying the bill, first introduced last year, and is a fan of its author, Sen. Kevin Thomas (D).