HR Ledger, Inc.

Review: At the beginning of 2014, my husbands former employer began using HR Ledger for their payroll services, which includes providing W2s for tax season. I noted that our 2014 taxes were higher, but didn't pay much attention. While I was preparing my 2015 taxes, I found that the W2 had errors in the way in handled both HSA contributions & the Qualified 125 health plan (not pre-tax, as it had previously been) which significantly increased our personal taxes. On 4/8/16 I notified the business/HR manager of my husband's former employer to notify her of the discrepancy, & on 4/11 received an email from the former employer with a forwarded email from [redacted] who acknowledged that I was correct about the HSA error & said: "I will do a W2 correction and get that to you" and "Also, Bad news…..since the ER Match code was zeroing out and not calculation correctly on the W2, I should really do W2c for each HSA Employee. Sorry for this issue. I really don’t know what and why it got changed but I will do my best to help get it fixed." An in-house W2 was created on 4/12 to adjust the wages based on the HSA correction (not the Qualified 125 Plan however). Because it was late in tax season, I was told it would take "1 - 3 weeks"to get the actual W2C. On 5/3, 5/10, & 5/20 I sent emails directly to [redacted] requesting information on "when I can expect to receive the W2C" & confirmation that the corrected numbers had been provided to the IRS/SSA. Each email had the automatic reply: "I am currently out of the office at this time. Your email has been forwarded to the Payroll Team in my absence." Unable to receive a reply from [redacted], on 5/12/16, I went to the HRLedger.com website & sent an email to i[redacted] detailing my concern, but received no reply whatsoever. I am primarily concerned that the IRS has never received the corrected W2 numbers which will signal an audit for me. I also think it's highly unfortunate that a HR company would not take care to ensure tax exemption for 125 Health Plans.Desired Settlement: I need confirmation that the IRS/SSA has received the corrected numbers for our W2. I understand the former employer will not address the issue with the 125 plan b/c: "To go back and retro to pre-tax would require all affected employees to refile their taxes and require us to do quite a bit of work." I do think that a company with a Revdex.com rating of "A+" & a member of "Integrity in Payroll Processing" should 1. respond to emails promptly, & 2. know tax laws to provide pre-tax benefits.

Business

Response:

We identify three separate issues in the correspondence from Ms. Search. 1) The change of a pre-tax health benefit to a post-tax health benefit, 2) an inaccurate withholding due to a HSA contribution and 3) our response to her concerns in a period of time she was expecting. Before addressing each of these concerns it must be understood that our relationship (contractual) is with her husband's employer and not the individual employees. We must clear each correspondence with our client prior to responding to employees. In this instance as well we are precluded from discussing client issues with the third party. 1) To address Ms. Search's accusation that we " . . . would not take care to ensure tax exemption for 125 Health Plans." This was an employer's choice. We can only advise clients of potential tax implications. 2) We take full responsibility for not finding the error in the HSA contribution calculation. This calculation is one of the more complicated and complex to set up in any system. 3) To address the issues of timely response we must remember that our correspondence must go back through her husband’s employer. Upon discovery of the HAS issue we decided Corrected IRS Form W-2 was the appropriate action. We audited the client's payrolls for every employee. Our staff provide to the client the specific information which will show on the Mr. Search’s Corrected W-2 shortly after discovering the issue. Then correction process was started and includes recalculating each payroll, reconstructing & filing each affected quarterly filing with the IRS, and reproducing each W-2 for those employee impacted. Those were then sent to the employer and the Corrected W-2 data was sent to the IRS. All at our expense. We certainly apologize for any inconvenience. This forum allows us the opportunity to publicly say "We are sorry for any troubles we may have caused you".

Consumer

Response:

I am rejecting this response because I need more detailed information. 1. Regarding: "This was an employer's choice. We can only advise clients of potential tax implications." On what dates was the employer advised about the "potential tax implications" of choosing to not have pre-tax deductions for health care. We were told that the employer had NOT known because the previous payroll company DID have the exact same plan indicated as a 125 plan. To be clear -- we accept this decision, however you are giving conflicting information by saying that your company did advise regarding this. 2. Thank you for taking responsibility for not finding it--we all make mistakes & I totally get that technology often causes more problems! 3. Please send the dates (you don't need to send the actual correspondence between you & the employer) of correspondence notifying the HR department of the process. The ONLY communication I received was forwarded on 4/12/16 with additional instructions that a corrected W2C would take "1 - 3 weeks" because of the busy tax season. I was never informed of the lengthy process. If I would have known that it would have taken until mid-May to complete the W2C (which we still have not received, nor have we received information that 2014 W2s would be corrected as well!) I would have filed for an extension but because the communication I received indicated the process would be much quicker, I filed already. I appreciate you pointing out that the communication problem was not on your end, however I am receiving conflicting information so I need exact dates of the communication between your company and the employer and if you can give some of the information -- obviously not anything confidential or proprietary -- that has instructions from your office about exactly how to notify the employees of the changes and the timeline, that would be greatly appreciated. Again, I absolutely appreciate your taking responsibility for the accidental mistakes -- totally ok, but because your response conflicts with information that the employer has given us, I just need to make sure all our bases are covered. Thank you for responding quickly.

Business

Response:

I wish to provide Ms. [redacted] with the information she requested.Item 1: Discussions were held on or about 12/15/2013 between the prospective client and our implementation team. The issue of benefit setup was questioned and confirm by the client.Item 2: Thank you for understanding.Item 3: The conversation between our staff and the client took place on or about 04/12/2016. Correspondence from the client to Ms. [redacted] explaining the situation took place on 04/12/2016.I hope this helps Ms. [redacted] clear up any conflicts with information she may have. [redacted]