Paychex Sucks

Of course the proposal did not have much information on the fees, that is how Paychex likes to sell, it is commonly referred to as bait-and-sinker. Well first you can expect $1,500-$2,500 in "start-up" fees to set up or transfer your plan which basically all goes to the sales rep. This fee can be waived or decreased, but the rep will fight for every cent because his commission directly relates to this amount. Usually that is the last price change a rep will offer if they think they will lose the deal, and considering that you have 35 employees the rep will NOT want to walk away from this deal. You will then have something like $125-$145 PER MONTH for access to mutual fund lineups. Then you will have $5 PER PARTICIPANT, PER MONTH (under 30 employees), not sure what it is for plans with 30+ employees. Plus do not forget the $750 per year in fees if you need Paychex to serve as Trustee of your plan. They also have additional fees from your financial advisor which can vary. Just ask the Paychex rep to put in writing every fee that you can expect the first year.

Don't use their 401k service. Google Paychex lawsuits and you will see why.

I understand the convenience factor of having Paychex move the funds and handle the reporting but from a support standpoint being a small client and a client of one of the largest 401k administrator the service is hoorendous. You can also expect to pay up to 2% on the investements on top of the normal investment fees regardless of performance, so if the fund has a 2% negative year, the employee will have a 4% negative year(that fee goes directly to Paychex), this could get you in trouble as the fuduciary because those fees come out of the employee investments and the employees would have a case against the plan sponsor (the company) as those fees are quite high. In addition your plan may be subject to audit in which case paychex may charge you as much as $9000. The Paychex 401k product may be their worst offering from a client standpoint, find another solution. From the standpoint of the sales rep it is probably the best offering, they stand to make a killing. There are tons of great 401k products out there, this is not one of them.

I understand the convenience factor of having Paychex move the funds and handle the reporting but from a support standpoint being a small client and a client of one of the largest 401k administrator the service is hoorendous. You can also expect to pay up to 2% on the investements on top of the normal investment fees regardless of performance, so if the fund has a 2% negative year, the employee will have a 4% negative year(that fee goes directly to Paychex), this could get you in trouble as the fuduciary because those fees come out of the employee investments and the employees would have a case against the plan sponsor (the company) as those fees are quite high. In addition your plan may be subject to audit in which case paychex may charge you as much as $9000. The Paychex 401k product may be their worst offering from a client standpoint, find another solution. From the standpoint of the sales rep it is probably the best offering, they stand to make a killing. There are tons of great 401k products out there, this is not one of them.

Excellent point and information. Thank you!

Trina, I worked as a 401(k) sales rep at Paychex for about 4 years. I have no reason to defend them at this point, but don't believe everything you have read from RUN, DON'T WALK AWAY. Also, Angry Dentist is outlining fees that are paid by the employer (which really shouldn't effect you). There are SOOO many 401(k) providers that add in extra fees. Believe it or not, the Paychex platform is actually one of the more straight forward providers (as long as your employer doesn't sign up for the "Mid Atlantic Trust Service"). That is a corporate trustee service that is charged to the participants and when you have very little overall company assets, it can really deplete your retirement account. Aside from that, I guess the employer could also elect to have his hard dollar costs billed to the plan assets, so you may want to ask if that will be the case. The only significant remaining fees are the actual fund expenses. While Paychex will most likely receive a cut of that from the fund companies, your employer has complete control over which share classes you use. Give me your email address if you want me to explain in more detail. Sadly, it's all about how well you understand the system (with any 401(k) provider) that helps you get the best deal for your participants.

Just had my payroll go unprocessed for the 2nd time this year- both on holiday weekends. Imagine being away on a business trip and getting a call from an employee..."uhhh, I didn't get my money and I really need it this weekend."

This is on top of screw-ups in other areas.

We've had 5 reps in 6 years (which should have told me enough already). 2 were really, really great. 1 could be called competent and 2 were complete shite. But every time I get really pissed and want to change, they give me a good rep. Unfortunately, that person eventually leaves and once again, I'm stuck with someone who seems to be going through the motions and doesn't understand what a mess it can cause when people don't get paid.

I get that people make mistakes but if they can't take the problems seriously and have a decent backup plan for when they screw up, what good are they?

I have worked for paychex for 2 years, i have never seen so much dishonesty in the workplace. From lying to customers to make them run within a certain timeframe, to promising long term discounts on payroll just to get them to run. We have lowered our price 55 percent in the past 60 days just to increase our sales. Clients that have left never want to come back, we have waived our setup fees provided free service up to 2 months free, and we practically have to whore ourself to sell payroll. Top place to work for NOT, Employee loyalty NOT, Management makes or brakes a company. My opinion is this company is going down the pisser and nothing is going to help.

Its a brutal small biz market in every sector. They just fired the head of sales not long ago, check it out they had to notify the SEC of the change.

I worked for paychex for 3 years and they are running a sweat shop and its like working in a coal mine

Can existing Paychex clients call their client service representative and take advantage of the new, lower pricing being offered to new clients? Do they have to threaten to leave the service?

Good question, when I signed with the local rep in my area she promised me a 45% discount for the life of my acct. Then come June I was paying full price and an increase of 4% additional on top. When I first started they deducted $100.00 for a set up fee which was never discussed. SHould of known from the beginning it was a deal too good to be true.

To answer two of the previous comments:

Comment from Question - The new package that is being sold to new clients is not being offered to current clients. My recommendation would be to call your payroll specialist or their supervisor and have them review the package that you are currently on. There might be different products that they can remove from your account that you may not be using all that much or can do without. If you are still not satisfied talk to the rep about other options that may be available to you.

Comment from poor sales ethics - Sadly enough I feel your frustration with the discounting and the setup fees. I know at my branch we have been taking steps to make sure that the client is aware that they are being charged for the setup fee and that there is a price quote that lists the discounts that they are on and how long they are good for in their first payroll package. Paychex does not discount for more than a year. Talk to your payroll specialist about the discount. They do have the ability to activate the discount again (with management approval) but it is usually not a problem. Your specialist can also send a reminder to themselves a year after the discount is activated to review the pricing with you again. I do that on a regular basis.

Whenever a Payroll/HR company sells Insurance or 401k, there's an inherent risk of a conflict of interest.
No wonder why so many people complain about the ADP's and Paychex of the world.
There are other solutions out there, and with some research, they are not difficult to find. California Employers: write me, I can help. jshea[at]employersguardian.com

Not for nothing but I am not sure who I would trust less, ADP, Paychex or a Financial Advisor? hhhmmm... Madoff or some moron sales rep at Paychex, that's a tough call?

Does anyone else see the strange similarities to the male model characters in Zoolander and many of the Paychex sales reps?

Looking back at the training class at Paychex it does kind of remind me of how they brainwashed Derick Zoolander. Oh my god, will I flip out and kill someone if "Relax" comes on the radio?

The people that always get the good reps, and then lose them... those reps usually came at a cost, when it was cost sutting time, they found ways to cut those employees. Most of the management believes that you can get more out of people for less money, so they would "transfer" employees to departments they did not want to go...then they say that is the only option they had... leaves no room for error. Def. not the best place to work for, and I have heard even worse stories lately.

Please share your "worse" stories, I have an interview set with their telemarketing office in Rochester and I'd like to learn more. I did a web search on some other B2B sites and the responses are 50/50 at best. Any insight would be helpful.

I can't believe what I have just read. The reason that Paychex has that kind of money in the bank is that they cheat. I am not talking about their rates. I was happy to pay them. They began to get to hard to deal with and their customer service did suck so we moved to ADP a couple of years ago. Guess what. We just got a letter from the IRS that we owe $10,000 for the last quarter of 2007 which of course with penalties and interst is now doupble that. Funny thing is that Paychex took that money out of our account and never paid the IRS. We have been calling them for months and they take no responsibility for their theft. They not only stole ten grand from our account but also cost us twenty grand to IRS. Plus we paid the fees to have this done. WOW!!!