Payroll delayed for some Steward employees due to bank processing error, company president says

BOSTON — Paychecks for some Steward Health Care employees were not deposited into their bank accounts due to a bank processing error, the company’s president said in a letter to employees on Thursday morning.

The governor’s office said it is looking into reports from Steward employees who say their paychecks didn’t process on Thursday morning, days after the beleaguered company filed for bankruptcy.

“We are aware that paychecks were not deposited today as scheduled. This is due to a processing error within the Bank of America system,” Steward Health Care President Mark Rich said in a letter to Steward employees on Thursday.

“Payroll and Benefits for all employees have been funded and they will begin to show in accounts over the next 24 hours,” Rich said. “Please check your account throughout the day and tomorrow. We followed all of Bank of America’s procedures following the chapter 11 filing and we were assured by them that this would not happen.”

“We know this is not an easy time for any of you and we apologize for this inconvenience,” Rich said. “Please let us know if you incur any late fees as a result of this and we will cover those. And thank you for your continued commitment to our patients and communities during this tough time. Thank You.”

The brief payroll delay occurred for some union members at three Steward-owned hospitals: Saint Anne’s, St. Elizabeth’s, and Carney, said Marlishia Aho, spokesperson for the SEIU 1199.

“We expect it will be fully resolved by the end of today or tomorrow,” Aho said.

State officials expect Steward employees to be paid “today or tomorrow.”

“What we think happened, we’ve learned from our advisors that in bankruptcy sometimes banks decide that they’re not going to honor a check for no reason,” said Mass. Health and Human Services Secretary Kate Walsh. “It was a banking problem, not a payroll problem.”

The Massachusetts Nurses Association earlier said the issue is a delay in some checks being deposited because of this week’s bankruptcy filing. They were told deposits should be in by Thursday night or Friday.

Governor Maura Healey offered long-term reassurance.

“Employees at Steward are getting paid, will continue to get paid,” said Governor Healey. “And our focus as an administration remains on protecting patients, protecting these workers and protecting  the stability of the healthcare market here in Massachusetts.”

Meanwhile, Steward Health Care wants to sell all of its hospitals by the end of the summer. Its 31 hospitals across the country will be auctioned off at the end of June.

Steward has eight hospitals in Massachusetts including Good Samaritan Medical Center in Brockton and St. Elizabeth’s in Brighton.

The for-profit company filed for bankruptcy protection early Monday morning. It was revealed in bankruptcy court yesterday that it has $9 billion in liabilities.

In a statement, Steward explained that it took this voluntary step to seek relief under Chapter 11 bankruptcy as a necessary measure to allow the company to continue to provide essential care to its patients in their communities without disruption.

This is a developing story. Check back for updates as more information becomes available.

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