MARYSVILLE, Ohio (WCMH) — Some Ohio Honda workers claim they brought home a $10 paycheck Friday — for two weeks of work.
“There’s a lot of people wondering how they’re going to pay their bills, feed their kids, get gas, come to work,” said one Honda employee, who spoke with NBC4 on the condition of anonymity.
This employee estimates about two-thirds of Friday’s paycheck was missing, but said he’s not the worst off.
“There were some people that I heard had zero balances. Some people, $5-10 for their entire paycheck,” he said.
A Thursday memo, shared with NBC4 by multiple Honda workers, alerted them to the issue.
“Through our internal process to maintain payroll quality, we have become aware of tax withholding errors that will impact tomorrow’s paychecks,” the top of the memo read.
Workers said Honda recently transitioned from weekly to bi-weekly paychecks and began using a new human resources system. Honda told NBC4 this week’s payroll issue was tied to the transition.
The issue affects employees on a Health Savings Account plan. Contributions to an HSA are not taxable income.
At Honda, single workers can receive yearly contributions of $900. Workers with dependents can receive $1,800.
The employees explained that the HSA contributions were still made, but the contribution amount was added to their taxable income, pushing them into a higher tax bracket and eating into their wages.
“It’s incredible. I’ve never had an employer get our payroll so wrong, so many times,” said a second Honda employee, who also asked to remain anonymous.
Honda sent a second memo to employees Thursday night.
“To address the over withholding on the HSA Honda contribution, we are quickly providing a payment to impacted associates,” the memo said, offering $225 to single enrollees and $450 to those enrolled with dependents.
“I personally work with a guy that ended up having lost over $1,000,” the second employee said.
The memo stated those payments should come through on Tuesday, Jan. 17. It is unclear whether those payments will be taxed as additional income.
A third memo sent Friday gives impacted workers the option to take out a $1,500 interest-free payroll loan.
“That’s almost a slap in the face to these people who were injured by this,” the employee said.
In a statement, a spokesman for Honda told NBC4:
“We are aware of payroll tax related issues that are impacting some Honda associates and we are working quickly to resolve the situation, including providing corrective payments to many impacted associates starting this weekend and the implementation of an interest-free payroll loan program. We have been actively communicating to our associates, alerting them that the issue had occurred, apologizing for the mistake, and providing updates as to how we are remedying the problem. The issue relates to a new HR system and payroll process intended to improve the overall employment experience for Honda associates. Our top priority now is to ensure that the pay issues are corrected as quickly as possible and we are diligently working to see that all associates are paid appropriately.”Honda spokesperson
The spokesperson said Honda is still determining how many employees were impacted.
This is Honda’s third payroll blunder in one year.
In December 2021, payroll software company Kronos was hacked, impacting pay for workers at companies all over the country, including Honda. Workers told NBC4 that it took up to nine months for some to receive the pay they were shorted as a result of the hack. A class-action lawsuit against Honda related to the disruption is pending in federal court.
In September, Honda told its Ohio workers that it had overpaid their bonuses, and that workers needed to pay the money back. At the time, workers told NBC4 that it would be difficult for them to pay back such a large sum all at once. Honda created payment plans for employees to return the money.
Sarah Cole, a labor attorney and professor at the Ohio State University Moritz College of Law, said the series of payroll issues could open the company to legal liability.
“Failure to do those types of things can be quite problematic for employers. There are just a myriad of issues that can come up,” Cole said. “It does seem like an ongoing issue that they probably need to pay greater attention to.”