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SAP payroll software woes plague electric utility for months

Confusion generated by Hurricane Sandy led to data-entry problems and incorrect pay for many National Grid workers

By Chris Kanaracus
February 5, 2013 04:14 PM ET

IDG News Service - Electric utility National Grid is still trying to resolve problems with its recently implemented SAP payroll system that cropped up after Hurricane Sandy, the major storm that caused widespread damage on the U.S. East Coast and the Caribeean in late October.

The system problems caused many workers at the utility to receive incorrect pay and has resulted in lawsuits filed by employee unions, as well as a $270,000 fine imposed on National Grid by Massachusetts' attorney general. An anonymous party even created a blog about the controversy, filling it with stinging criticisms of National Grid.

National Grid recently told employees that it would delay the distribution of W-2 forms, which workers will need to file their taxes, until Feb. 28.

"We're still working through individual employee issues," National Grid spokesman Patrick Stella said in an interview this week. "We're hoping to have these issues taken care of as soon as possible."

The W-2s were delayed for good reason, he added. "We wanted to make sure they were accurate."

National Grid's SAP project dates back a number of years and will provide a unified payroll system that replaces several legacy systems, according to Stella.

Installing SAP at a company like National Grid is "a challenging process to begin with," Stella said. That's because the business is spread over multiple states, each with different regulatory bodies and tax reporting requirements, he said.

The fact that Sandy hit the East Coast just as the project went live was another major issue, as employees were being shifted en masse out of their usual work jurisdictions in order to restore power, and racked up a lot of overtime, according to Stella. "There was a lot of complicated things going on with payroll," he said.

While utilities like National Grid also use contracted crews from out of state to boost manpower during serious outages, that wasn't a factor with Sandy and the SAP system woes, according to Stella. "Contractors will bill us after the fact."

National Grid is going to not only pay out whatever remaining monies are owed to workers, but also cover any personal costs the payroll issues may have occurred, such as bank late fees, Stella said.

He declined to comment on the ongoing litigation and how it may be resolved. Union officials couldn't be reached for comment.

But in a letter sent to National Grid executive director Thomas King in November, one union said the project's go-live date should have been delayed given the imminent arrival of Sandy. National Grid's actions represented a "gross error in judgment," International Brotherhood of Electrical Workers Local 97 president Ted Skerpon said in the letter.

Reprinted with permission from IDG.net. Story copyright 2014 International Data Group. All rights reserved.
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