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SF payroll firm Rippling has to delay payouts after Silicon Valley Bank collapse

337 points by Akharin 4y ago

Arrath 4y ago
Oof, heavy hit for people relying on those paychecks being timely. Decent of Rippling to cover overdraft fees of those affected, at least.
- readthenotes1 4y ago
  Can you imagine the conversation this morning? "Hey, your paycheck won't be coming today and I need you drop what your doing and make an emergency change to our apis so that we can use JP Morgan Chase. We're going to have to skip all the usual test environments."
  - maxerickson 4y ago
    Would sort of hope that they had the backup for their key business function integrated ahead of time. The delays in the article can just be the bank processing time post switch. Doesn't look like it provides the information to tell either way.
  - wil421 4y ago
    Someone put an extra comma in a CSV file and payroll was delayed for about 20k US employees who did not get paid timely. They covered any overdraft fees. I would’ve been in tears if I was the dev but you have to pick yourself up and move on. If a single dev could’ve done this there’s a problem with the process and organization.
frgtpsswrdlame 4y ago
Kind of annoying that the CEO is writing out details on twitter before they contact the affected companies...
- andrewxdiamond 4y ago
  I kindof assume a decision meeting just finished, and the CEO took to Twitter the same time the PR department started drafting emails. I expect the email contains much more specific instructions and an actual process to follow. These things take time to write, even at SEV1 priority. The CEO is biasing towards speed of notification, so they tweet some quick details out ASAP while the PR team gets moving. That’s just my perspective tho. I am assuming many things
- flappyeagle 4y ago
  Not it’s not. It’s good communication
- hackernewds 4y ago
  Better to hear directly from the CEO in a distributed fashion. I see that as taking ownership (compare to LastPass)
edgyquant 4y ago
Anyone who, like me, was wondering about Gusto they say the do not use SVB https://mobile.twitter.com/GustoHQ/status/1634246761194594338 https://mobile.twitter.com/GustoHQ/status/163424676119459433...
- ISL 4y ago
  Was surprised to get an email this evening from Gusto saying the same. Not a usual email from your payroller!
- hoofhearted 4y ago
  Increase.com has also confirmed that their banking partners are insulated from the SVB situation.
- SyzygistSix 4y ago
  "Gusto utilizes a redundant system of leading banking partners to facilitate our payroll processing and services to provide peace of mind for the unexpected." was the interesting part to me. I wonder if this is standard practice. It sounds like Rippling did not do this where Gusto did but that may be misleading. Anyone in the industry have insight?
mabbo 4y ago
Is there a resource we can all use to find out if our employer is in a similar situation?
- bombcar 4y ago
  If you look at your bank you may be able to see the originating bank for your last direct deposit - or if you get an actual paystub it may list the bank.
- Scoundreller 4y ago
  Couldn’t one check and see which bank your ACH transfer was sent from? I guess it depends on your bank whether this is readily visible, but if not, should be available through a simple phone call to a rep that’s allowed to see more than end-users are exposed to.
- HarryHirsch 4y ago
  Off to the Department of Labour, they won't look kindly on late paychecks.
  - wahnfrieden 4y ago
    For those unaware, dept of labor takes late paychecks seriously and will help you as a worker. Late paychecks and other forms of wage theft make up the single largest category of theft. Too bad more people are riled up over small time crimes like shoplifting leaving many in the dark about what they can do about their employers stealing from them.
    - throwayyy479087 4y ago
      Both categories of crime are serious. I don't know why that's not an option.
      - HarryHirsch 4y ago
        Fun fact: the catholic church considers both murder and late wages "sins that cry to heaven". If someone can't make the rent because someone else messed up it can have enormous ripple effects.
deleted 4y ago
[deleted]
vladaionescu 4y ago
This article is slightly click-baity. The payments are delayed in some cases, not held out altogether. From what I'm hearing so far, Rippling has changed banks over night and has instructed all clients to update the ACH filters accordingly. Only payroll cycles caught in-between will be affected, but even then they are delayed, but not held.
- codetrotter 4y ago
  > The payments are delayed in some cases, not held out altogether That would still be a disaster for me. But I guess that says more about me and my lack of financial stability, than it says about anyone else..
  - colechristensen 4y ago
    I've often been in the same situation. None of us should be. Not just to protect ourselves from weird situations from this. Financial freedom is power in so many ways. (and peace of mind)
- dhruvrrp 4y ago
  Not really. According to the CEO's tweets the payroll funds are stuck in SVB, but Rippling is using their own funds/collateral to fund the payroll. Ref: https://twitter.com/parkerconrad/status/1634315187837861889 https://twitter.com/parkerconrad/status/1634315187837861889
- jmvoodoo 4y ago
  We just received this from Rippling: Hi Rippling Customer, Yesterday afternoon, Rippling learned that Silicon Valley Bank (SVB) had solvency challenges. We have been working with SVB to ensure timely payments to our customers’ employees. However, this morning we learned that the FDIC had stepped in and taken control of SVB. We are reaching out to you because you have a payroll that has already been processed for 3/15/2023. Currently, these funds may be sitting with SVB. We are closely monitoring the FDIC takeover and what it means for this pay run. We ask that you please reach out to your bank and request that your bank return any ACH transactions debited from your account by Rippling into SVB under the premise that the transaction(s) are unauthorized, since the bank has ceased operations and is unable to honor the payments. If the bank agrees to issue a return, you will then need to send a wire to Rippling for the full amount of the 3/15/2023 payroll run by Tuesday 3/14/2023 at 12 PM PST. This help center article has updated wire instructions. Your 3/15/2023 payroll will be marked as Non-sufficient Funds (NSF) on Rippling’s end, but as long as we have received the wire, Rippling will issue employee payments for 3/15/2023 via our new banking partner, JP Morgan Chase & Co. If the bank does not agree to issue a return, we will follow up with additional instructions. If you have questions, please reach out to our support team. Thanks, The Rippling Team
ummonk 4y ago
The article headline is clickbait. They're immediately doing payouts through JP Morgan Chase now; the only delay is because some payouts were in flight when they got stuck in SVB, so if a payout was started via SVB a few days ago and was going to arrive today (because bank transactions aren't instantaneous), the new payouts will take a few days to arrive via JP Morgan Chase.
- 0cf8612b2e1e 4y ago
  So people are not receiving their promised money on time? Sounds like the title is accurate. Not everyone has the float to handle an unexpected delay in money. People can also suffer liquidity events.
  - ofchnofc 4y ago
    [dead]
  - c22 4y ago
    Gp was adding nuance to the discussion that I found informative. Parent's post offers only a trite reminder with the goal, I suppose, of suppressing said nuance?
  - VirusNewbie 4y ago
    There’s a huge difference between “oops we had a payroll issue it will be there tomorrow” and “oops lol our money is gone we can’t make payroll, maybe we can get a loan next week”.
    - dccoolgai 4y ago
      If you were an employee at a typical startup, would you be able to tell the difference? Because leadership is never _that_ transparent with the rank-and-file around these kinds of things. I've seen it happen (thankfully never to me) - over and over again they would say "whoops, it will be there next week". Two months later people - one by one - just stop showing up...
impulser_ 4y ago
Do businesses not do any risk assessments to prevent things like this from happening? Especially a business that is providing a critical service to businesses. Why are they using a regional bank to handle this?
- smileysteve 4y ago
  "a regional bank", only 18th biggest in the US.
  - impulser_ 4y ago
    That only exists in a few regions, hence regional.
- colechristensen 4y ago
  Considering the value of SVB stock until yesterday, no reasonable risk assessment would have found anything actionable until yesterday. Payroll being delayed a few days is indeed annoying, but it's not the end of the world.
  - impulser_ 4y ago
    Yeah but you have a lot of companies who money is stuck with SVB. Not one of them decided to check out a financial statement for the company holding their money. I checked out their financial statements and they are pretty incredible. They grew their HTM portfolio from ~10b to ~100b in two years. Then you had the Fed come out and say hey we are increasing rates and we aren't going to stop. No one at these companies well like hey maybe this will become a problem and we should protect our cash. Roku had 25% cash at this bank. Why?
jonathankoren 4y ago
Parker Conrad? The guy that famously instituted MASSIVE fraud at Zenefits? Eeeek! Talk about failing up! https://techcrunch.com/2017/10/26/sec-fines-zenefits-nearly-1-million-for-misleading-investors/ https://techcrunch.com/2017/10/26/sec-fines-zenefits-nearly-...
ddevault 4y ago
This website's tracking consent pop-up is unlawful: unticking each spyware service one at a time rather than a one-click opt-out is not permitted by the GDPR.

337 points by Akharin 4y ago

Oof, heavy hit for people relying on those paychecks being timely. Decent of Rippling to cover overdraft fees of those affected, at least.

readthenotes1 4y ago
Can you imagine the conversation this morning? "Hey, your paycheck won't be coming today and I need you drop what your doing and make an emergency change to our apis so that we can use JP Morgan Chase. We're going to have to skip all the usual test environments."
- maxerickson 4y ago
  Would sort of hope that they had the backup for their key business function integrated ahead of time. The delays in the article can just be the bank processing time post switch. Doesn't look like it provides the information to tell either way.
- wil421 4y ago
  Someone put an extra comma in a CSV file and payroll was delayed for about 20k US employees who did not get paid timely. They covered any overdraft fees. I would’ve been in tears if I was the dev but you have to pick yourself up and move on. If a single dev could’ve done this there’s a problem with the process and organization.

frgtpsswrdlame 4y ago

Kind of annoying that the CEO is writing out details on twitter before they contact the affected companies...

andrewxdiamond 4y ago
I kindof assume a decision meeting just finished, and the CEO took to Twitter the same time the PR department started drafting emails. I expect the email contains much more specific instructions and an actual process to follow. These things take time to write, even at SEV1 priority. The CEO is biasing towards speed of notification, so they tweet some quick details out ASAP while the PR team gets moving. That’s just my perspective tho. I am assuming many things
flappyeagle 4y ago
Not it’s not. It’s good communication
hackernewds 4y ago
Better to hear directly from the CEO in a distributed fashion. I see that as taking ownership (compare to LastPass)

edgyquant 4y ago

Anyone who, like me, was wondering about Gusto they say the do not use SVB https://mobile.twitter.com/GustoHQ/status/1634246761194594338 https://mobile.twitter.com/GustoHQ/status/163424676119459433...

ISL 4y ago
Was surprised to get an email this evening from Gusto saying the same. Not a usual email from your payroller!
hoofhearted 4y ago
Increase.com has also confirmed that their banking partners are insulated from the SVB situation.
SyzygistSix 4y ago
"Gusto utilizes a redundant system of leading banking partners to facilitate our payroll processing and services to provide peace of mind for the unexpected." was the interesting part to me. I wonder if this is standard practice. It sounds like Rippling did not do this where Gusto did but that may be misleading. Anyone in the industry have insight?

mabbo 4y ago

Is there a resource we can all use to find out if our employer is in a similar situation?

bombcar 4y ago
If you look at your bank you may be able to see the originating bank for your last direct deposit - or if you get an actual paystub it may list the bank.
Scoundreller 4y ago
Couldn’t one check and see which bank your ACH transfer was sent from? I guess it depends on your bank whether this is readily visible, but if not, should be available through a simple phone call to a rep that’s allowed to see more than end-users are exposed to.
HarryHirsch 4y ago
Off to the Department of Labour, they won't look kindly on late paychecks.
- wahnfrieden 4y ago
  For those unaware, dept of labor takes late paychecks seriously and will help you as a worker. Late paychecks and other forms of wage theft make up the single largest category of theft. Too bad more people are riled up over small time crimes like shoplifting leaving many in the dark about what they can do about their employers stealing from them.
  - throwayyy479087 4y ago
    Both categories of crime are serious. I don't know why that's not an option.
    - HarryHirsch 4y ago
      Fun fact: the catholic church considers both murder and late wages "sins that cry to heaven". If someone can't make the rent because someone else messed up it can have enormous ripple effects.

deleted 4y ago

[deleted]

vladaionescu 4y ago

This article is slightly click-baity. The payments are delayed in some cases, not held out altogether. From what I'm hearing so far, Rippling has changed banks over night and has instructed all clients to update the ACH filters accordingly. Only payroll cycles caught in-between will be affected, but even then they are delayed, but not held.

codetrotter 4y ago
> The payments are delayed in some cases, not held out altogether That would still be a disaster for me. But I guess that says more about me and my lack of financial stability, than it says about anyone else..
- colechristensen 4y ago
  I've often been in the same situation. None of us should be. Not just to protect ourselves from weird situations from this. Financial freedom is power in so many ways. (and peace of mind)
dhruvrrp 4y ago
Not really. According to the CEO's tweets the payroll funds are stuck in SVB, but Rippling is using their own funds/collateral to fund the payroll. Ref: https://twitter.com/parkerconrad/status/1634315187837861889 https://twitter.com/parkerconrad/status/1634315187837861889
jmvoodoo 4y ago
We just received this from Rippling: Hi Rippling Customer, Yesterday afternoon, Rippling learned that Silicon Valley Bank (SVB) had solvency challenges. We have been working with SVB to ensure timely payments to our customers’ employees. However, this morning we learned that the FDIC had stepped in and taken control of SVB. We are reaching out to you because you have a payroll that has already been processed for 3/15/2023. Currently, these funds may be sitting with SVB. We are closely monitoring the FDIC takeover and what it means for this pay run. We ask that you please reach out to your bank and request that your bank return any ACH transactions debited from your account by Rippling into SVB under the premise that the transaction(s) are unauthorized, since the bank has ceased operations and is unable to honor the payments. If the bank agrees to issue a return, you will then need to send a wire to Rippling for the full amount of the 3/15/2023 payroll run by Tuesday 3/14/2023 at 12 PM PST. This help center article has updated wire instructions. Your 3/15/2023 payroll will be marked as Non-sufficient Funds (NSF) on Rippling’s end, but as long as we have received the wire, Rippling will issue employee payments for 3/15/2023 via our new banking partner, JP Morgan Chase & Co. If the bank does not agree to issue a return, we will follow up with additional instructions. If you have questions, please reach out to our support team. Thanks, The Rippling Team

ummonk 4y ago

The article headline is clickbait. They're immediately doing payouts through JP Morgan Chase now; the only delay is because some payouts were in flight when they got stuck in SVB, so if a payout was started via SVB a few days ago and was going to arrive today (because bank transactions aren't instantaneous), the new payouts will take a few days to arrive via JP Morgan Chase.

0cf8612b2e1e 4y ago
So people are not receiving their promised money on time? Sounds like the title is accurate. Not everyone has the float to handle an unexpected delay in money. People can also suffer liquidity events.
- ofchnofc 4y ago
  [dead]
- c22 4y ago
  Gp was adding nuance to the discussion that I found informative. Parent's post offers only a trite reminder with the goal, I suppose, of suppressing said nuance?
- VirusNewbie 4y ago
  There’s a huge difference between “oops we had a payroll issue it will be there tomorrow” and “oops lol our money is gone we can’t make payroll, maybe we can get a loan next week”.
  - dccoolgai 4y ago
    If you were an employee at a typical startup, would you be able to tell the difference? Because leadership is never _that_ transparent with the rank-and-file around these kinds of things. I've seen it happen (thankfully never to me) - over and over again they would say "whoops, it will be there next week". Two months later people - one by one - just stop showing up...

impulser_ 4y ago

Do businesses not do any risk assessments to prevent things like this from happening? Especially a business that is providing a critical service to businesses. Why are they using a regional bank to handle this?

smileysteve 4y ago
"a regional bank", only 18th biggest in the US.
- impulser_ 4y ago
  That only exists in a few regions, hence regional.
colechristensen 4y ago
Considering the value of SVB stock until yesterday, no reasonable risk assessment would have found anything actionable until yesterday. Payroll being delayed a few days is indeed annoying, but it's not the end of the world.
- impulser_ 4y ago
  Yeah but you have a lot of companies who money is stuck with SVB. Not one of them decided to check out a financial statement for the company holding their money. I checked out their financial statements and they are pretty incredible. They grew their HTM portfolio from ~10b to ~100b in two years. Then you had the Fed come out and say hey we are increasing rates and we aren't going to stop. No one at these companies well like hey maybe this will become a problem and we should protect our cash. Roku had 25% cash at this bank. Why?

jonathankoren 4y ago

Parker Conrad? The guy that famously instituted MASSIVE fraud at Zenefits? Eeeek! Talk about failing up! https://techcrunch.com/2017/10/26/sec-fines-zenefits-nearly-1-million-for-misleading-investors/ https://techcrunch.com/2017/10/26/sec-fines-zenefits-nearly-...

ddevault 4y ago

This website's tracking consent pop-up is unlawful: unticking each spyware service one at a time rather than a one-click opt-out is not permitted by the GDPR.