ADP Charges for Services for Terminated Employees Class Action

ADP, LLC provides payroll and human resource management services to companies. The complaint for this class action alleges that ADP sometimes continues to charge per-person fees for terminated employees unless the company involved specifically “archives” the terminated persons. It also claims that ADP does not adequately disclose the need to take this step, but simply continues to charge companies.

The class for this action is all persons in the US who, between March 5, 2015 and the present, received ADP Workforce Now or other ADP services under the Global Master Services Agreement, substantially identical to Attachment A at the filing of the original complaint, and the form Sales Orders substantially identical to Attachment B at the filing of the original complaint, and who were charged a periodic fee for both active and terminated workers who had not been “archived.”

ADP generally charges a per-employee fee for its services. For example, a certain type of service may be priced at $1.50 per employee.

Fees therefore vary over time, as companies hire or let go of workers. “Thus,” the complaint claims, “if a business with 100 employees is forced to lay off or terminate half of its workforce, it should pay a lower monthly fee for the same services after the layoffs. But that is not always the case.” The complaint alleges that ADP may continue to count, and charge for, the laid-off or terminated employees.

The complaint alleges, “Although the fees for most of [ADP’s] services will be reduced by the termination of an employee, for a few services—typically the more expensive ones—the fees will not be reduced merely by terminating an employee, but rather require the additional and separate step of ‘archiving’ the employee in order to receive a reduced fee for that service.”

Why doesn’t a company simple do this? The complaint claims that ADP “does not disclose, or does not adequately disclose, to its customers that they must manually archive their terminated employees to receive a reduced fee for these services.”

“Worse,” the complaint charges, ADP “takes steps to purposefully obscure from its customers the need to archive their terminated employees—e.g., by issuing misleading invoices that hide [ADP’s] overcharges; by refusing to separately bill for non-archived terminated employees as required by its customer agreements; and even by misrepresenting to its customers that they do not need to archive employees but overcharging them for those employees anyway—so that [ADP] can collect additional, unearned fees from its customers.”

How much does this cost its clients? The plaintiff for this class action, Kares Management, Inc., the complaint contends, has paid a lot: “Indeed, [Kares] estimates that it alone has paid at least $61,000.00 in unearned, unlawful overcharges to” ADP. According to the complaint, ADP’s policies are deceptive business practices, violating New York’s General Business Law as well as New York common law.

Article Type: Lawsuit
Topic: Consumer
Tags: Deceptive Business Practices, Excessive Fees, Overcharges for Services, Unfair Business Practices