This is an update to our letter of June 17, 2009 concerning municipalities affected by Ameripay payroll processing service being placed into receivership by the US District Court. We have been informed that Ameripay’s operations will be suspended as of June 30, 2009, and a petition for Chapter 7 bankruptcy will be filed shortly thereafter. For those municipalities using the services of Ameripay, please bear in mind two critical matters as a result of this course of action:
Because Ameripay will not provide any payroll or tax services after June 30, 2009, you should transition to an alternate payroll service provider immediately. A handbook and Local Finance Notice addressing payroll servicing and agency matters issued by the Division of Local Government Services is online at www.nj.gov/dca/lgs/research/reschmenu.shtml#3rdParty.
Consideration should also be given to working through banks or using provisions of the Local Public Contracts law to contract with a new service provider.
To the extent your employees have been or will be paid, through June 30, 2009, with checks drawn on Ameripay accounts, please instruct those employees to deposit their checks immediately. Any Ameripay checks that remain uncashed as of the date on which the Chapter 7 petition is filed will not be honored.
Upon the commencement of the Chapter 7 proceeding, a bankruptcy trustee will be appointed to administer Ameripay’s estate. If your municipality used Ameripay and has been harmed, consult your municipal attorney about bankruptcy claims.
Very truly yours,
William G. Dressel, Jr.
New Jersey State League of Municipalities • 222 West State Street • Trenton, NJ 08608 • (609) 695-3481 •FAX: (609) 695-0151