16,000 UK employees not paid; 'human error' at bank blamed

jpatton1@herald-leader.comFebruary 28, 2014 

More than 16,000 University of Kentucky employees might not have been paid Friday morning because of a banking glitch.

A spokeswoman for PNC Bank said Friday afternoon that the problem was "human error," not a cyber-security issue.

"PNC's risk management team identified an issue with the payroll file received from UK and delayed its processing out of caution but did not do what was necessary to ensure it reached University of Kentucky employee accounts on time," said Marcey Zwiebel of Pittsburgh-based PNC. "What happened here was human error, and we are addressing the issue to make sure nothing like this happens again.

"We recognize how important paychecks are to people, and we sincerely apologize to the entire UK community for the delay. We regret any inconvenience. We are committed to making funds available as soon as possible."

The money was released before noon Friday, but that was too late to reach many employees. Apparently, only employees who are paid every two weeks are affected; salaried employees — including faculty, who are paid monthly — were paid.

UK is Lexington's largest employer, with thousands of workers.

UK's executive vice president for finance and administration, Eric N. Monday, said the university was working with employees' banks to post the payments but that some workers might not be paid until Monday night.

University spokesman Jay Blanton said 5,000 of the paychecks were posted by 5 p.m. Friday. In an update online at 9 p.m. Friday, Monday wrote that "Our expectation is that by tomorrow (Saturday) afternoon nearly two-thirds of staff and student employees impacted by this issue will have had their pay posted into their accounts. By Monday evening, we expect that all of the issues will have been resolved."

Updates are being provided at www.uky.edu.

UK set up a call center to help employees who need financial assistance for the weekend with pre-paid debit cards. The call center will be open from 7 a.m. to noon Saturday. The number for the call center is (859) 257-9254. The call center will provide locations for picking up debit cards.

Monday said in the statement that UK will cover fees and penalties for employees whose checks bounce.

Zwiebel said employees who bank at PNC were to see the money in their accounts by the end of the day Friday. UK Credit Union, Fifth Third Bank, Central Bank, U.S. Bank, Members Heritage, Whitaker Bank or Community Trust also were scheduled to have checks posted to accounts by the end of Friday, UK officials said.

Those who bank at some other large banks that will process the deposit overnight should see the money Saturday. But those who bank at smaller institutions might not see their paychecks deposited until Monday, Zwiebel said.

Sheila Brothers, a UK staff trustee, said she noticed Friday morning that her paycheck was not in her account, but money she sets aside for a separate vacation account was paid.

"I'm concerned about people who will be nervous this weekend because they didn't get their paycheck," said Brothers, who works in UK's Office of the Senate Council.

Faculty trustee John Wilson said he was glad UK officials were taking the situation seriously and working to get it fixed quickly.

"We all know how important it is for folks to get their paychecks promptly, especially in tough economic times when many people struggle to make ends meet and live from paycheck to paycheck," said Wilson, a professor of behavioral science. "I was glad to see the quick email to the campus, that came with an apology for the problem and assurances that they were taking this very seriously."

Jeff Spradling, chairman of the staff senate and head of UK's Robinson Scholars Program, said he expected to get a dozen emails by the end of the day from concerned employees. Already, he had heard from student interns who had not been paid.

"People need their paychecks," Spradling said. "People are going to be mad about this, and rightfully so."

Many people have mortgage and bill payments scheduled to be automatically paid out of individual bank accounts near the end of the month. Friday was the last day of February.

"We know that this issue poses a significant hardship for UK staff and student employees, and we regret that it has occurred. The university will ensure that overdrafts, non-sufficient fund charges and late fees will be covered," according to UK's statement.

PNC's Zwiebel said local PNC branches also will help: UK employees who are not PNC customers may cash a check for as much as $200 without any fees; they must present a UK employee ID and a driver's license. Kentucky Bank branches also agreed to cash $200 personal checks.

"So people do have access to some help immediately," she said.

There was no estimate of how much the problem will cost the university or the bank.

According to figures from 2012, UK employs about 2,500 faculty and 9,000 staff. An additional 3,000 employees work for UK Healthcare.

Many employees became aware of the problem only after receiving notice from supervisors as they came to work Friday morning. According to the statement from Monday, the finance and administration vice president, UK "started receiving reports from concerned employees about 6 a.m. (Friday) that the scheduled posting of biweekly paychecks had not occurred."

Herald-Leader staff writer Linda B. Blackford contributed to this report. Janet Patton: (859) 231-3264. Twitter: @janetpattonhl.

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