SF payroll firm Rippling has to delay payouts after Silicon Valley Bank collapse(sfgate.com)
sfgate.com
SF payroll firm Rippling has to delay payouts after Silicon Valley Bank collapse
https://www.sfgate.com/tech/article/rippling-pay-silicon-valley-bank-17832441.php
130 comments
"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?
Was surprised to get an email this evening from Gusto saying the same. Not a usual email from your payroller!
Increase.com has also confirmed that their banking partners are insulated from the SVB situation.
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.
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
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
> 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.
This seems a little ... odd. To be very clear, I'm not on the bank's side at all... but if the ACH is already debited, then your bank would absolutely be in the right to not return it as unauthorized, because the bank ceased operations _after_ the transaction.
This seems a little ... odd. To be very clear, I'm not on the bank's side at all... but if the ACH is already debited, then your bank would absolutely be in the right to not return it as unauthorized, because the bank ceased operations _after_ the transaction.
Aren't they telling their customers to cancel transfers into SVB?
(seems like the flow of funds is customer bank -> SVB -> [maybe more] -> payroll payees)
Seems likely enough that those transfers will fail to clear in a couple days, not bad to get ahead of that if possible.
(seems like the flow of funds is customer bank -> SVB -> [maybe more] -> payroll payees)
Seems likely enough that those transfers will fail to clear in a couple days, not bad to get ahead of that if possible.
Right, but that's my point, not necessarily agreeing with the motivation or such. If the transfer went through before the FDIC shuttered them this AM, it could be argued that the transaction was entirely authorized _at the time_ the ACH debit occurred.
Hopefully banks will sympathize, but I don't know that you can say "the bank was forcibly closed the day after this ACH transaction, so it's unauthorized, because I intended to have those funds flow outbound later".
It would be unauthorized if the ACH debit was _initiated_ after the closure of the bank.
Hopefully banks will sympathize, but I don't know that you can say "the bank was forcibly closed the day after this ACH transaction, so it's unauthorized, because I intended to have those funds flow outbound later".
It would be unauthorized if the ACH debit was _initiated_ after the closure of the bank.
Regardless of the correctness or legality of the advice, it's a bit odd to wade in and give it at all isn't it? Why not steer well clear? Seem friendly/helpful and buy goodwill I suppose?
Rippling has received the money, and it then disappeared while in Rippling's account.
If Rippling can get their customers to somehow get that money out and wire it again, Rippling may not be on the hook for replacing the missing money.
If Rippling can get their customers to somehow get that money out and wire it again, Rippling may not be on the hook for replacing the missing money.
It's Rippling's account at SVB. They literally can't steer clear of the transfers.
Right now, the funds are still showing at least in our online portal. I will be visiting the branch tomorrow and hopefully can prevent the transfer from completing.
Not a fun email to receive either way.
Not a fun email to receive either way.
Oh no, I can only imagine, and please don't think for a moment that I'm saying that you shouldn't be able to cancel the transfer. And I hope you can!
Just more that it's odd for Rippling to say that people should report the transaction as unauthorized, because on a strict technical timeline, it wasn't, until the bank was closed, so if it had already debited someone's account before then...
Just more that it's odd for Rippling to say that people should report the transaction as unauthorized, because on a strict technical timeline, it wasn't, until the bank was closed, so if it had already debited someone's account before then...
We bank with Mercury and I couldn't get a hold of them in business hours after receiving this email at 5:30PM CET on a Friday (unsurprisingly). This email seems odd to me, Mercury shows a transaction posted as of March 9 for employee payments, and another posted as of March 10 for tax payments. Had I was successful in contacting Mercury, would they even be able to reverse them?
Rippling should be working with FDIC to sort out these in-flight payments, not asking their customers this. When I reached their support team for what the additional instructions are, I couldn't get an answer. This situation sure doesn't look great.
Rippling should be working with FDIC to sort out these in-flight payments, not asking their customers this. When I reached their support team for what the additional instructions are, I couldn't get an answer. This situation sure doesn't look great.
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
Ref: https://twitter.com/parkerconrad/status/1634315187837861889
> 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..
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..
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)
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)
> even then they are delayed, but not held.
If I understand it correctly:
1. Businesses processing payroll through Rippling wired money to Rippling's account as SVB
2. Rippling would now normally use that money to pay the businesses employees.
3. Before that could happen, SVB went upside-down. Some of the money may be lost, the rest is frozen.
4. The businesses owe their employees their pay, but may not have enough money to simply pay for payroll a second time.
5. Rippling owes the money to the businesses (respectively, has an obligation towards the businesses to pay their payroll), but may not have the money to do so after some amount of funds just disappeared and another larger amount just got frozen for an unknown amount of time.
6. Employees of these businesses won't be receiving their pay on time, and may not be able to receive it at all if the money they're supposed to be paid with is gone and neither their employer nor Rippling can afford to cover the loss and goes bankrupt.
Edit: based on a tweet linked elsewhere in this thread, Rippling is putting up its own money to make sure payroll goes through, so it should indeed just be one business day of delay + possibly additional small delays because some companies didn't make the necessary adjustments to keep future payroll runs working.
If I understand it correctly:
1. Businesses processing payroll through Rippling wired money to Rippling's account as SVB
2. Rippling would now normally use that money to pay the businesses employees.
3. Before that could happen, SVB went upside-down. Some of the money may be lost, the rest is frozen.
4. The businesses owe their employees their pay, but may not have enough money to simply pay for payroll a second time.
5. Rippling owes the money to the businesses (respectively, has an obligation towards the businesses to pay their payroll), but may not have the money to do so after some amount of funds just disappeared and another larger amount just got frozen for an unknown amount of time.
6. Employees of these businesses won't be receiving their pay on time, and may not be able to receive it at all if the money they're supposed to be paid with is gone and neither their employer nor Rippling can afford to cover the loss and goes bankrupt.
Edit: based on a tweet linked elsewhere in this thread, Rippling is putting up its own money to make sure payroll goes through, so it should indeed just be one business day of delay + possibly additional small delays because some companies didn't make the necessary adjustments to keep future payroll runs working.
> delayed
If the money was sitting in an account at SVB, which it was, it’s at risk.
If the money was sitting in an account at SVB, which it was, it’s at risk.
Oof, heavy hit for people relying on those paychecks being timely.
Decent of Rippling to cover overdraft fees of those affected, at least.
Decent of Rippling to cover overdraft fees of those affected, at least.
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."
"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."
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.
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.
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.
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.
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.
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.
"Clickbait" doesn't necessarily mean something that's inaccurate - it can (and usually does) mean something that's phrased in a way - often by omission - so as to imply the most sensational possible interpretation of the words' literal meaning.
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”.
Deposits are insured. Payments will resume Monday. But headline is accurate. Payments delayed.
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...
"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..."
That's the kind of delay one expects from reading the headline and why it is clickbait. In actually the payouts are already on their way via JP Morgan Chase and will have arrived by Monday for everyone.
That's the kind of delay one expects from reading the headline and why it is clickbait. In actually the payouts are already on their way via JP Morgan Chase and will have arrived by Monday for everyone.
I dunno. I've seen management be sketchy on transparency before. But when it comes to people's money getting into their hands, I've actually never had management do the "whoops, it will be there next week" thing. It's always been straight forward with what happened and with expectations. Which makes sense, as you said, people won't show up if they don't get there money.
It's all circumstantial anyway. I don't think it's fair to call this a case of a "typical startup". Although it's definitely a stereotype of startups.
It's all circumstantial anyway. I don't think it's fair to call this a case of a "typical startup". Although it's definitely a stereotype of startups.
I don't know how I would reword it, but the current headline gave me the impression that Rippling had money deposits stuck in the bank and hence couldn't pay people on time.
[deleted]
Is it typical for US companies issue pay on the last possible contractual day? I don't think this is usual practice in the UK - for example my contact specifies that I will be paid by the last day of the month, but typically we get the payment several days earlier, sometimes add much as a week.
Yes, in my experience (US and Canada), if paydays are the 1st and 15th, or every second Thursday, or whatever, then the money appears on precisely that day (adjusting for holidays, weekends, etc. by paying sooner).
Pretty much always the 1st and 15th. If either of those fall on a weekend or bank holiday then paid the nearest business day before. That sounds very annoying to not know what day you're getting paid.
Especially +/- a whole week.
Especially +/- a whole week.
I think getting paid every two weeks (eg every other Friday) is more common. This makes it easier for everyone to plan. Also how you get the payroll situation where every few years, people get an additional pay period [0].
[0] https://www.thebalancemoney.com/paying-employees-in-a-year-w...
[0] https://www.thebalancemoney.com/paying-employees-in-a-year-w...
Oh they let us know in advance. Anyway, being paid early isn't really a problem. If you're planning when outgoings should happen then you just need to plan on the contractual day, not assume that it will get there earlier. I think most larger companies usually pay on that same day but modulo weekends, so the last Thursday of the month or similar.
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?
> Clickbait … is designed to attract attention and to entice users to [engage with] content, being typically deceptive, sensationalized, or otherwise misleading. - Wikipedia
This is literally clickbait. Y’all need to chill. It’s sensationalized and misleading relative to the severity of todays events.
The title is “technically correct” but it sensationalizes it for sure. Reading that title you expect Rippling to be going under or severely impacted. Which it sounds like so far they’re not (again relatively).
This is literally clickbait. Y’all need to chill. It’s sensationalized and misleading relative to the severity of todays events.
The title is “technically correct” but it sensationalizes it for sure. Reading that title you expect Rippling to be going under or severely impacted. Which it sounds like so far they’re not (again relatively).
> so if a payout was started via SVB a few days ago and was going to arrive today (because bank transactions aren't instantaneous)
FedNow instant payments are supposed to go live this spring/summer. Feels like it should have been 10 years ago.
FedNow instant payments are supposed to go live this spring/summer. Feels like it should have been 10 years ago.
Even in Britain, which has had a similar instant transfer system for 15 years, it's not unusual for payroll to use the slower system.
Though in searching for statistics, I found several payroll processing companies advertising that they would use the Faster Payments (instant) system. The business can keep the money for an additional couple of days, which is presumably an advantage if money is tight.
Though in searching for statistics, I found several payroll processing companies advertising that they would use the Faster Payments (instant) system. The business can keep the money for an additional couple of days, which is presumably an advantage if money is tight.
It's frustrating that we don't even have one day settlement for most transactions.
So it’s literally not clickbait and payments were delayed…
We're talking about a 1-2 working day delay, depending on recipient bank. You wouldn't bat an eyelid if it weren't already in the news, I've certainly had pay delayed or incorrect longer, for non-big-news reasons.
The title is perhaps yes strictly speaking accurate, but it's still clickbait, it deliberately implies trouble pouring on an already flaming fire, when actually this sounds like an extremely minor symptom - some ash in the hair of the stoker.
The title is perhaps yes strictly speaking accurate, but it's still clickbait, it deliberately implies trouble pouring on an already flaming fire, when actually this sounds like an extremely minor symptom - some ash in the hair of the stoker.
It’s overblown but pretty relevant news. SVB is the cause, and there could be more before it blows over. 1-2 business day delay for highly paid salaried workers usually isn’t a big deal but it can really turn the screws on lower paid hourly staff like their warehouse workers. They are getting mailed checks, and may then have check clearing delays. They could end up with missed payment fees, overage fees, credit card advance fees, or payday loan fees just trying to feed their family over the weekend. Payroll is always serious. SVB’s mismanagement has real consequences for real people, and reporting those is worthwhile.
All that said, Rippling is doing everything they reasonably can and I’m sure they’ll make their workers whole.
All that said, Rippling is doing everything they reasonably can and I’m sure they’ll make their workers whole.
A surprisingly large percentage of highly compensated workers are living paycheck to paycheck. All it takes is living right at or above your means.
>The article headline is clickbait.
Oh? Okay, let's see, it starts with...
>SF payroll firm Rippling has to delay payouts...
And then you said...
>The only delay is because...
So, two sentences later you've confirmed the headline's accuracy yourself.
Oh? Okay, let's see, it starts with...
>SF payroll firm Rippling has to delay payouts...
And then you said...
>The only delay is because...
So, two sentences later you've confirmed the headline's accuracy yourself.
No, there is a substantial difference between the two.
GP says that Rippling did not delay payouts. In fact, the payouts went out in time - they were delayed in transit, outside of Rippling's control, and Rippling immediately made another payout through a different bank.
The headline suggests that there were issues at Rippling, which meant that the payouts did not go out in time. That is a completely different scenario, so the headline would indeed be inaccurate.
GP says that Rippling did not delay payouts. In fact, the payouts went out in time - they were delayed in transit, outside of Rippling's control, and Rippling immediately made another payout through a different bank.
The headline suggests that there were issues at Rippling, which meant that the payouts did not go out in time. That is a completely different scenario, so the headline would indeed be inaccurate.
I mean, there are issues at Rippling. They had to switch banks and it caused a delay in getting payments to their clients' employees. That's a fact.
Yes, the issue was caused by their bank and not Rippling themselves, but the purpose of the article is to highlight how a separate company is impacted by the SVB fallout. At the end of the day, it's still an issue Rippling has to deal with.
I mean, that's why the headline goes on to say, "after SVB collapse". It makes clear that Rippling is suffering because of SVB.
Yes, the issue was caused by their bank and not Rippling themselves, but the purpose of the article is to highlight how a separate company is impacted by the SVB fallout. At the end of the day, it's still an issue Rippling has to deal with.
I mean, that's why the headline goes on to say, "after SVB collapse". It makes clear that Rippling is suffering because of SVB.
How it is not Rippling responsibility which bank they use? We are not even arguing responsibilities anyway. There are delays if you are using Rippling which is the title.
No. Amazon ships you a product with UPS. UPS notifies Amazon that their driver has eaten the package and they're very sorry. Amazon ships out a new package.
The new package, provided the driver doesn't eat it, will arrive delayed. But Amazon didn't delay it, nor do they "have to" delay sending packages.
"SF payroll firm Rippling finds some payouts delayed" would be accurate. "Has to delay" implies that they "had to" make a choice to delay payments, e.g. because they don't have the funds available.
Yes, it's a subtle change in wording, but it's a very different issue.
The new package, provided the driver doesn't eat it, will arrive delayed. But Amazon didn't delay it, nor do they "have to" delay sending packages.
"SF payroll firm Rippling finds some payouts delayed" would be accurate. "Has to delay" implies that they "had to" make a choice to delay payments, e.g. because they don't have the funds available.
Yes, it's a subtle change in wording, but it's a very different issue.
> "SF payroll firm Rippling finds some payouts delayed" would be accurate. "Has to delay" implies that they "had to" make a choice to delay payments, e.g. because they don't have the funds available.
The article makes it pretty clear that Rippling felt they "had to" switch banks upon SVB's failure Friday morning. Whether we agree on whether or not they truly had to doesn't change the fact that this was apparently a move they felt they needed to do immediately.
It's like everyone in this thread saying, "They didn't have to," was somehow magically privy to internal Rippling convos.
The article makes it pretty clear that Rippling felt they "had to" switch banks upon SVB's failure Friday morning. Whether we agree on whether or not they truly had to doesn't change the fact that this was apparently a move they felt they needed to do immediately.
It's like everyone in this thread saying, "They didn't have to," was somehow magically privy to internal Rippling convos.
No, you're misunderstanding the point. If the headline would be "Rippling had to switch banks after...", it would be accurate and not clickbait.
The headline is "Rippling has to delay payouts after..." though, which is completely different. They haven't delayed payouts. Some payouts are delayed, because they were in flight when the plane crashed. That's not "delaying payouts", that's "payouts are delayed". They'd would be "delaying payouts" if they said "we're only resuming payouts starting on Friday", but that's not what's happening.
It's like Amazon shipping a product. The product gets eaten by the courier. Amazon sends out a new product. Your shipment is delayed, but Amazon isn't delaying it. The eating delayed it, not Amazon.
Just because they "had to" do one thing doesn't mean a headline can claim they "had to" do other things. Like, a similar headline would be "Rippling had to defraud the government after...". Totally inaccurate, they didn't do that. It's not about the "had to", it's about the "did they actually delay payments", which is an active process and requires intent. They didn't, and that makes the headline inaccurate.
The headline is "Rippling has to delay payouts after..." though, which is completely different. They haven't delayed payouts. Some payouts are delayed, because they were in flight when the plane crashed. That's not "delaying payouts", that's "payouts are delayed". They'd would be "delaying payouts" if they said "we're only resuming payouts starting on Friday", but that's not what's happening.
It's like Amazon shipping a product. The product gets eaten by the courier. Amazon sends out a new product. Your shipment is delayed, but Amazon isn't delaying it. The eating delayed it, not Amazon.
Just because they "had to" do one thing doesn't mean a headline can claim they "had to" do other things. Like, a similar headline would be "Rippling had to defraud the government after...". Totally inaccurate, they didn't do that. It's not about the "had to", it's about the "did they actually delay payments", which is an active process and requires intent. They didn't, and that makes the headline inaccurate.
>... it's about the "did they actually delay payments", which is an active process and requires intent.
You mean like making the big decision to switch banks during a crisis like this knowing that payments would likely be delayed as a part of the process? Huh, would ya look at that.
If you're aware of the fallout that will occur when you make a decision, and you still make that decision, it's your fault. They knew what would, or could, happen and they said, "Do it".
If we really want to compare this to Amazon, the correct analogy would be, "This item ships to you every two weeks. It would normally arrive today, but Amazon chose to switch carriers at the last minute which requires package re-routing, so it will arrive in two days". There wouldn't have been a delay if Amazon (or Rippling) hadn't switched carriers (or banks).
You mean like making the big decision to switch banks during a crisis like this knowing that payments would likely be delayed as a part of the process? Huh, would ya look at that.
If you're aware of the fallout that will occur when you make a decision, and you still make that decision, it's your fault. They knew what would, or could, happen and they said, "Do it".
If we really want to compare this to Amazon, the correct analogy would be, "This item ships to you every two weeks. It would normally arrive today, but Amazon chose to switch carriers at the last minute which requires package re-routing, so it will arrive in two days". There wouldn't have been a delay if Amazon (or Rippling) hadn't switched carriers (or banks).
Payments are delayed that already were underway because the failed bank didn't actually send the money. So they switched banks and send everything else via JP Morgan so that it doesn't get delayed. They're not switching banks and delaying payments because of that.
> If you're aware of the fallout that will occur when you make a decision, and you still make that decision, it's your fault. They knew what would happen and they said, "Do it".
No, the delay is because of the failing of the bank they used. Certainly, if they had known that this bank would be taken over and not actually execute the orders and just cease to exist, and they still would have said "do it", then they'd be to blame. But they weren't aware that the bank would stop operating suddenly, just like everyone else (including the bank itself, apparently).
> There wouldn't have been a delay if Amazon (or Rippling) hadn't switched carriers (or banks).
Of course there would be. If they hadn't switched, the payments that were in flight when the bank shut down would still not be completed, and additional payments would also not go through until the situation at the bank is resolved in some way or another.
Like, if one plane crashes, and you want some cargo to arrive somewhere, of course you send a different plane, even though it can't arrive at the same time as the original plane. Not doing so would actually delay the whole thing, and that would've been a choice. But that's simply not what happened.
> If you're aware of the fallout that will occur when you make a decision, and you still make that decision, it's your fault. They knew what would happen and they said, "Do it".
No, the delay is because of the failing of the bank they used. Certainly, if they had known that this bank would be taken over and not actually execute the orders and just cease to exist, and they still would have said "do it", then they'd be to blame. But they weren't aware that the bank would stop operating suddenly, just like everyone else (including the bank itself, apparently).
> There wouldn't have been a delay if Amazon (or Rippling) hadn't switched carriers (or banks).
Of course there would be. If they hadn't switched, the payments that were in flight when the bank shut down would still not be completed, and additional payments would also not go through until the situation at the bank is resolved in some way or another.
Like, if one plane crashes, and you want some cargo to arrive somewhere, of course you send a different plane, even though it can't arrive at the same time as the original plane. Not doing so would actually delay the whole thing, and that would've been a choice. But that's simply not what happened.
[deleted]
> But Amazon didn't delay it
Yes, they did by their choice if provider. Services are end to end, you don’t get to pass off responsibility for things like that.
Yes, they did by their choice if provider. Services are end to end, you don’t get to pass off responsibility for things like that.
No, generally we only consider active choices to be something someone chose to do. If UPS had a history of drivers eating every other package, you might argue that it's a risk that's baked in, but they don't.
And neither did this bank have a history of breaking down.
If your car is on fire and then explodes, nobody would say "jen20 had to detonate their car", because it implies that you pushed a button to make it explode. "Well, they could have known that that brand of cars has a 1 in 1000000000 chance of blowing up, so they did it by choice of car" isn't something you'll hear.
And neither did this bank have a history of breaking down.
If your car is on fire and then explodes, nobody would say "jen20 had to detonate their car", because it implies that you pushed a button to make it explode. "Well, they could have known that that brand of cars has a 1 in 1000000000 chance of blowing up, so they did it by choice of car" isn't something you'll hear.
If I order a package from Amazon, and it doesn’t show up on time and in the condition, I blame Amazon, not their subcontractor with whom I have no relationship. A longer supply chain does not mean the divestiture of responsibility.
Note I am NOT suggesting that every package must arrive on time, just that when they do not, it is Amazon who must perform the service recovery rather than a delivery company.
That is no different in this case.
Note I am NOT suggesting that every package must arrive on time, just that when they do not, it is Amazon who must perform the service recovery rather than a delivery company.
That is no different in this case.
> I blame Amazon, not their subcontractor with whom I have no relationship
Totally. But you wouldn't say that "Amazon chose to delay my package", you'd say "my package got delayed, UPS should really make sure not to use that package-eating driver or Amazon should stop using UPS".
"Amazon delayed my package" = "Amazon intentionally delayed my package so that it doesn't arrive on time". "My Amazon package got delayed" = "The package got delayed, but no intention is implied or expected". In both cases it's on Amazon to get you your package, but in one case Amazon is after you and is intentionally holding back packages instead of shipping them to you.
Totally. But you wouldn't say that "Amazon chose to delay my package", you'd say "my package got delayed, UPS should really make sure not to use that package-eating driver or Amazon should stop using UPS".
"Amazon delayed my package" = "Amazon intentionally delayed my package so that it doesn't arrive on time". "My Amazon package got delayed" = "The package got delayed, but no intention is implied or expected". In both cases it's on Amazon to get you your package, but in one case Amazon is after you and is intentionally holding back packages instead of shipping them to you.
>But you wouldn't say that "Amazon chose to delay my package", you'd say "my package got delayed, UPS should really make sure not to use that package-eating driver or Amazon should stop using UPS".
No, in if Amazon is standing in for Rippling here, you would say that Amazon normally ships with UPS but made a last-minute decision to switch carriers. This requires some last minute logistical adjustments resulting in your delayed package.
No, in if Amazon is standing in for Rippling here, you would say that Amazon normally ships with UPS but made a last-minute decision to switch carriers. This requires some last minute logistical adjustments resulting in your delayed package.
Funny, I usually blame the courier first. Some have an established track record of delaying deliveries, or claiming that they tried to deliver but nobody was at home. (I call the latter the "Finnish post office" strategy.) Repeat offenders get punished by not having business in the future. Eventually.
However, you are right from a customer's perspective. A third party cock-up is not an excuse - it may not be your fault, but it still is your problem.
However, you are right from a customer's perspective. A third party cock-up is not an excuse - it may not be your fault, but it still is your problem.
Tomato tomato. If you were expecting your paycheck today it’s not coming till Monday at the earliest.
That’s a delay.
Sometimes banks really do hate #7. Sometimes you really won’t believe #11.
Accuracy alone is not an ironclad defense against clickbait.
Accuracy alone is not an ironclad defense against clickbait.
Incredible that the boring routine movement of a paycheck is somehow exposed to someone’s questionable bond investments
"has to delay payouts" -> "the only delay is because"
so there are in fact delayed payouts.
so there are in fact delayed payouts.
It’s misleading at least. At best this means _some_ payouts are delayed, but definitely still coming. Given the rest of the news today that’s practically a non-issue.
some payouts is not no payouts. it's an amount of payouts
> definitely still coming
aka delayed
or in summation
"payouts are delayed"
> definitely still coming
aka delayed
or in summation
"payouts are delayed"
Nuance and degrees exist. A title of "humans are dying" could _literally_ mean 2+ people died in a local car accident, or all of humanity is dead, or an article about actuarial life expectancy, or an ongoing war/crisis, or an opinion piece about how AI _might_ kill us all. That's a valid "summation" of any of those. Pretty much can't be wrong because it conveys nothing, except clickability.
The point is that was not the best way to phrase it given the actual details of the situation and the surrounding context.
Technically correct is not always the best kind.
Even "SF payroll firm Rippling has to delay payouts by 1 day after Silicon Valley Bank collapse" is infinitely more clear and communicative.
The point is that was not the best way to phrase it given the actual details of the situation and the surrounding context.
Technically correct is not always the best kind.
Even "SF payroll firm Rippling has to delay payouts by 1 day after Silicon Valley Bank collapse" is infinitely more clear and communicative.
Again, the simplicity of "payouts are delayed" is quite succinct. I do not understand why you further wish to split hairs, and I no longer have an interest in continuing this conversation.
The employees of the companies which outsourced their payroll operations to Rippling did not receive the ACH credits to their account on the specified date and time. This is not clickbait. Payment did not occur as scheduled. Payments have been delayed.
This is a pretty big issue in the state of CA. Not paying on time results in a $100 fine per paycheck failure and subsequent infractions are $200 and 25% of what the employee is owed.
It's CA Labor Code 210 if anyone is interested in looking it up.
It's CA Labor Code 210 if anyone is interested in looking it up.
I scrolled to the comments, as I often do, to see if this link was worth clicking. After reading GP's comment I decided not to click. Sounds like clickbait.
Rippling’s EPO service is technically an employer however and D&O doesn’t cover missed payroll. If they miss a payroll due to this, it’ll be on their EPO board to cover the cost no?
>They're immediately doing payouts through JP Morgan Chase
And is JP Morgan safe from having similar issues with SVB?
And is JP Morgan safe from having similar issues with SVB?
[deleted]
JP Morgan Chase is the largest bank in the United States. If JP Morgan Chase was taken over by the FDIC, it wouldn't be payroll delays that were making the headlines.
I think it is safe to say JPM has a different relationship with the federal US government than a comparatively tiny bank like SVB.
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-...
Eeeek! Talk about failing up!
https://techcrunch.com/2017/10/26/sec-fines-zenefits-nearly-...
Is there a resource we can all use to find out if our employer is in a similar situation?
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.
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.
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.
Not to be flippant, but ask your manager or your HR people. The best people to know who does your company's payroll are the people at your company.
Off to the Department of Labour, they won't look kindly on late paychecks.
Seems unnecessary and malicious.
Im not sure why anyone would want to report their employer for a minor delay when a bank is folding. Hopefully the DOL would ignore that.
It is basically the same as reporting your employer because for a late check because the mailman got shot on your doorstep.
I feel like it also does a disservice to people who have real late paycheck abuses.
Im not sure why anyone would want to report their employer for a minor delay when a bank is folding. Hopefully the DOL would ignore that.
It is basically the same as reporting your employer because for a late check because the mailman got shot on your doorstep.
I feel like it also does a disservice to people who have real late paycheck abuses.
The warning signs were all there since January. There needs to be some incentive for the employer not to use an unsound bank because if there aren't you end up in a situation like this, where the government needs to step in again and bail out depositors because the alternative would be worse.
If it was a single company, then it might help. But this is likely to affect hundred if not thousands of companies. Millions of potential complaints. That will be a cluster, if everyone does complain. DOL may not like it, but they will likely take into account the fact that these were caused by a bank failure to a scale we've not seen in a decade. At the end of the day the culprit is a bank that's now toast, or the FDIC... who's immune.
And if this goes on for any length of time, you could sue your employer... but lack of payroll would only happen if the company no longer has any money - effectively making them bankrupt. Again you could name SVB in the lawsuit, or the FDIC... but good luck getting blood from the stone.
And if this goes on for any length of time, you could sue your employer... but lack of payroll would only happen if the company no longer has any money - effectively making them bankrupt. Again you could name SVB in the lawsuit, or the FDIC... but good luck getting blood from the stone.
>And if this goes on for any length of time, you could sue your employer... but lack of payroll would only happen if the company no longer has any money - effectively making them bankrupt. Again you could name SVB in the lawsuit, or the FDIC... but good luck getting blood from the stone.
You could also sue the CEO directly. Failure to pay employee wages is one of the few things that can (somewhat) easily pierce the corporate veil.
You could also sue the CEO directly. Failure to pay employee wages is one of the few things that can (somewhat) easily pierce the corporate veil.
Which is why an enormous number of people will be fired, furloughed or reduced to minimum wage on Monday if this isn’t resolved.
Well it's all moot, the fed stepped in and we're all safe.
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.
Very true, but this seems like a surprise logistical payment obstacle for most employers and not anything deserving the label of theft. I suspect most departments of labor would see it that way as well, not penalizing employers who were otherwise able and willing to make payroll even if they might indeed help the affected workers.
Both categories of crime are serious. I don't know why that's not an option.
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.
Yes, and emphasized in Jewish law, too.
- Leviticus 19:13 - "You shall not leave [with you] the payment of a worker overnight until the morning..."
- Deuteronomy 24:15 - "On his day you should give his wages, the sun should not set on it, because he is a poor man and his life depends on it...”
And that's true whether you're a super-religious Chassid type or a super-socialist Workman's Circle Bundist type:
https://www.chabad.org/library/article_cdo/aid/1218800/jewis...
https://www.laborpress.org/workmen-s-circle-backs-fight-for-...
- Leviticus 19:13 - "You shall not leave [with you] the payment of a worker overnight until the morning..."
- Deuteronomy 24:15 - "On his day you should give his wages, the sun should not set on it, because he is a poor man and his life depends on it...”
And that's true whether you're a super-religious Chassid type or a super-socialist Workman's Circle Bundist type:
https://www.chabad.org/library/article_cdo/aid/1218800/jewis...
https://www.laborpress.org/workmen-s-circle-backs-fight-for-...
Simple: other forms of theft lead to violence immediately
Who will be liable? The employer? Rippling?
No one's going to be liable for a paycheck that's late by a few days due to the collapse of the bank through which the paycheck was being wired.
Trick is to be first in the queue, whether that be first in filing for a missed paycheque (because it may not be the last missed), withdrawing funds first from a failing bank, or by regularly processing your payroll before a Friday when everyone else tries to.
Not sure why everyone sticks to payroll on Fridays. It’s not the early/mid 1900s where you have to worry about workers going on payday benders.
Not sure why everyone sticks to payroll on Fridays. It’s not the early/mid 1900s where you have to worry about workers going on payday benders.
> Who will be liable? The employer? Rippling?
To the employee, the employer. To the employer, Rippling. It's wild that, as a payment processor, they didn't have redundant rails.
To the employee, the employer. To the employer, Rippling. It's wild that, as a payment processor, they didn't have redundant rails.
It's hard to make 100% timeliness guarantees when the courier that's carrying money from one place to another dies on its way. How would they have a redundant courier?
This wouldn’t work in reality, but the only thing I can think of that would work in theory is to send the money close but not all the way at 3x delivery time. Like, to their bank but they don’t give the money to the customer until payday. If it fails, you have time to resend. You can’t just deliver early because that becomes the expectation (ie we get paid on Tuesday). Again, not suggesting this is reality.
[deleted]
> would they have a redundant courier?
Two or more banks. Process through both on a regular basis. Switch if something goes wrong.
Two or more banks. Process through both on a regular basis. Switch if something goes wrong.
That seems like a reasonable precaution, but it doesn't seem clear that would have helped much in this case.
SV bank had the funds this morning and says the paychecks are going out, FDIC comes in at noon Rippling heard that checks haven't gone out in the afternoon, and now JPMorgan has the info and is overnight processing.
SV bank had the funds this morning and says the paychecks are going out, FDIC comes in at noon Rippling heard that checks haven't gone out in the afternoon, and now JPMorgan has the info and is overnight processing.
It takes a certain amount of time to confirm it went off rails in the first place, no? They're not going to make every payment twice from two different banks and then reverse one after confirming delivery.
berkle4455(1)
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.
[deleted]
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?
Why are they using a regional bank to handle this?
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.
Payroll being delayed a few days is indeed annoying, but it's not the end of the world.
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?
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?
"a regional bank", only 18th biggest in the US.
That only exists in a few regions, hence regional.
Kind of annoying that the CEO is writing out details on twitter before they contact the affected companies...
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
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
Not it’s not. It’s good communication
Better to hear directly from the CEO in a distributed fashion. I see that as taking ownership (compare to LastPass)
https://mobile.twitter.com/GustoHQ/status/163424676119459433...