
ADP intentionally broke its Zenefits integration - netaustin
Zenefits sent us an email on Friday which seems to have attracted no attention.<p><i>When you originally set up Zenefits, you created an Zenefits admin user in your ADP RUN payroll account to let Zenefits manage your payroll—set up new employees, manage deductions, remove departing employees—on your behalf.<p>Yesterday, without your permission, ADP systematically deactivated these accounts—accounts that you set up, in your payroll system, to allow Zenefits to work on your behalf. The reason for this is that ADP believes it can one day build software to compete with Zenefits, and in the meantime they would like to do anything they can to impede Zenefits.<p>ADP is claiming that they are taking this action for &quot;security&quot; reasons—but this is clearly not true. For years, ADP has let customers add third parties—a bookkeeper or an accounting firm, for example—to their payroll system to manage payroll on a company&#x27;s behalf. What Zenefits does is no different. In fact, even today, ADP will let you add a third-party administrator to your payroll system unless they have a Zenefits.com email address.</i><p>To avoid the Intuit upsell quagmire, we&#x27;re hoping to switch to ZenPayroll for Q3. But the Zenefits automatic quote builder doesn&#x27;t seem to know that ZenPayroll is nationwide now, so down the support rabbit hole I go. Payroll sucks.
======
gumby
I understand why ADP does this -- they are horrible to work with so people are
willing to stick someone like Zenefits in between.

My horrible ADP story: years ago, ADP debited the IRS taxes twice -- so all
the paychecks bounced, or would have if the bank hadn't called me and let me
move money into the payroll account from the main account (yes kids, don't let
your payroll, or anyone, deduct money directly from your company's main
account). It was a couple of hundred K.

Customer service was completely uninterested. Finally I got it escalated to
the manager of the local ADP office. He said he couldn't understand why I was
upset -- the IRS would just credit us the amount next month. He also couldn't
understand why I kept saying that they had taken the money out without
authorization: "we didn't take your money -- we sent it to the IRS. We don't
have your money so it makes no sense to give it back to you. I actually have
no mechanism to put money _into_ a customer account anyway." Finally I got
annoyed and agreed with him: "you're right, I shouldn't say you 'took' it, I
should use the correct term: 'felony grand theft.' And if I don't have the
money in my account by the 4pm I will discuss this with the Santa Clara
Sheriff."

Magically, the company that had "no mechanism to put money into a customer
account" managed to put $250K into our payroll account by the time the fed
wire closed. Who would have guessed?

That's the last payroll I ran with ADP.

~~~
iiiggglll
> That's the last payroll I ran with ADP.

Nicely done. Which service did you start using instead of ADP?

~~~
gumby
First I switched to Paychex which back then was a startup founded by a bunch
of ADP folks who thought they could do better. And they could, until they grew
big (and I believe were acquired).

So now I use PrimePay. I heard about it from a friend who runs a restaurant,
amazingly enough, but they have been good for several companies with headcount
in the hundreds and in multiple states.

------
apalmer
I just went digging around the zenefits.com and pulled this verbiage out,
which i think outlines the fundamental business problem:

'Zenefits works with all top payroll providers, so there's no need to switch
from your favorite system.'

ADP doesn't want to be a 'provider' in the 'Payroll As A Service' sense.
Further Zenefits entry point into the market is based on the low friction of
you not needing to leave your current payroll system...

why on earth would ADP let this continue?

~~~
markbnj
I see you getting downvoted, but I don't think that's fair. Whether people
like it or not this is almost certainly how ADP views the situation. The term
"disintermediation" used to be tossed around 10-15 years ago, to describe the
process of upstart tech companies getting between older, slower moving
companies and their customers. ADP is definitely in the older, slower moving
category. Defense is probably the only real offense they can bring to bear. I
know they do business as a back office provider to various resellers who
target segments they aren't particularly good at servicing. They probably
don't view the Internet as a candidate for this, though.

~~~
matthewsimon
Sorry to quibble, but I don't think that's what "disintermediation" means.

Disintermediation typically refers to "cutting out the middleman", not
introducing additional middlemen.

Cf:
[https://en.wikipedia.org/wiki/Disintermediation](https://en.wikipedia.org/wiki/Disintermediation)

~~~
markbnj
It's been a long time since I heard the term, probably late 90's or somewhere
in that timeframe. At the time I was in the banking business and there were
various services that were launching with the idea of aggregating bank
accounts, rolling up loan offers into portals, etc. The term
"disintermediation" was used as a label for what happened to you if you let
someone else capture your customer's attention and just treat you like a
supplier. I'm sure there were other uses at the time, and later.

~~~
rahimnathwani
"The term "disintermediation" was used as a label for what happened to you if
you let someone else capture your customer's attention and just treat you like
a supplier."

Banks, along with selling their own products, act as middlemen to sell other
types of product (e.g. insurance). The only disintermediation I can think of
in relation to retail banks, is the move for people to buy things like
insurance from (i) web sites, who may kick back some of the commission that
would otherwise go to the bank, or (ii) insurers who sell direct through their
own channels.

What you describe is intermediation or reintermediation:
[http://www.investopedia.com/terms/r/reintermediation.asp](http://www.investopedia.com/terms/r/reintermediation.asp)

------
ohitsdom
ADP online access is awful. They make up a username for you, some combination
of first initial, last name @ company name. Then the login isn't a modern
system, it's the old "authentication required" browser pop up, which disables
any user remembering or password managers. Such a pain to deal with!

~~~
mikeryan
ADP is awful. Period.

We used them for a year and a half and they fucked up every time we added or
removed an employee and everything I heard was that Paychex was just as bad.

We had employees in CA and NYC which meant ZenPayroll wasn't on the table for
a while and then we switched all our HR to Trinet so it never made sense to
make the switch to Zen Payroll.

~~~
CWuestefeld
_ADP is awful. Period._

I worked there about 20 years ago. Once they actually messed up, and needed to
recall, all of our employee paychecks.

------
rblatz
ADP has some of the worst online offerings. In order to see my paystub or
signup for health coverage I use one site. To request time off I have to use a
different ADP site. Both have different usernames and passwords.

Both sites look like they were made in the IE 5/6 web development drought. I
have no real complaints though with how everything actually works though,
never had an incorrect paycheck or messed up PTO.

~~~
Someone1234
It is pretty typical to split sensitive personal information (e.g. SSN, pay,
health records, etc) from administrative activities (e.g. leave requests). In
the event that the administrative side gets compromised, it will limit how
"bad" that compromise might be, additionally they may be required to store
sensitive information differently (e.g. better physical security, server-drive
encryption, etc).

~~~
voidlogic
In a well designed system this kind of segmentation and isolation can be done
in a way that is transparent to the user experience.

TL;DR Have your front end talk to multiple backends-

~~~
zimbatm
The front end is where it usually gets compromised

~~~
Dylan16807
Then both passwords get captured on the front end.

There's no benefit to multiple accounts unless the more important one is used
much more rarely.

------
lexap
I hope I never have to use ADP, but that said, their response makes Zenefits
sound like a bunch of crybaby Valleyholes.

[http://www.adp.com/zenefits/downloads/The-Facts-About-ADP-
an...](http://www.adp.com/zenefits/downloads/The-Facts-About-ADP-and-
Zenefits.pdf)

~~~
crystaln
If only they put as much effort into their product as they do toward defending
their honor.

------
olafskyansian
Here is ADP's response to this brouhaha.

[http://www.adp.com/zenefits/downloads/The-Facts-About-ADP-
an...](http://www.adp.com/zenefits/downloads/The-Facts-About-ADP-and-
Zenefits.pdf)

What I don't get is if the integration is one-way from Zenefits to ADP (and
not vice versa) why all the data allegedly being pulled back from ADP?

------
cbzink000
When I was back at an automotive startup, we had to write an integration with
ADP's DMS. I can say without a doubt that it was the worst API I have ever had
the misfortune of working with. Horribly buggy, the documentation didn't match
the output, endpoints disappeared at random, different endpoints required
different auth keys. Made no sense at all.

I even remember a time when our ADP representative called us and said she
thought the project should be called off due to the amount of malformed
payloads we were sending her.... on our development account. Not production..
Not even testing. Development.

ADP has left a bitter taste in my mouth since then.

------
jeffasinger
This is basically because Zenefits and ADP indirectly compete.

ADP, Paychex and some other major payroll providers make quite a bit of money
be using their relationships with companies to sell insurance and other
benefits to their customers. Zenefits is basically an insurance broker, and
therefore competing with ADP on this front (which is a lot of revenue for both
companies).

Payroll really shouldn't suck, the basics of it should be pretty easy. The
problem is that the vast majority of payroll providers are nearly impossible
to work with.

Disclosure: I work at Employii, a company that makes payroll/hr software
designed for integration with insurance brokers.

~~~
olafskyansian
When you think about where the $$$ is, they DIRECTLY compete.

I think the thing people don't realize is that there is way more money in
insurance than there is in payroll, ADP knows this and so does Paychex.

At my last company, I think we paid about $90 per employee per year for
payroll processing, W-2s and employee self-service.

A broker commission for health insurance is conservatively 3% of the total
annual premium. So with an average family premium (employee and employer)
hovering around $17k a year, the commission on that plan would be $500+
dollars, well over five times what you could earn by actually doing payroll.
an employee electing single coverage with a total premium around $7k a year is
still far and away more valuable than "payroll"

If you look at ADPs earnings transcripts for the past year, you'll see this
area is where the growth is at. It's even stronger at Paychex where benefits
constitutes basically all of their growth.

------
bwb
We use ADP and they are one of the worst companies to work with, very very
difficult and their web interface is like the 90s.

~~~
netaustin
That's what initially sold us on Zenefits, though — it puts a reasonably
polished interface on ADP, which is reliable enough for the commodity money
transfer service it provides, I guess. Same goes for Aetna — Zenefits puts a
nice UI on commodity health insurance. Working with a traditional broker was a
nightmare.

~~~
colmvp
Zenefits was easily one of the worst experiences I've ever had for dealing
with switching/canceling health insurance.

~~~
foobarqux
Can you elaborate?

------
koyote
Reading all these comments about how ADP is the worst for any of its online
tools (and in my experience, it really is), could someone enlighten me as to
why so many companies use them? Is there no alternative?

~~~
mixmastamyk
It's not an uncommon situation when an incumbent is entrenched and have not
faced real competition.

------
_delirium
Blocking any kind of automatic access not explicitly provided for (via an
official API, often paid) is quickly becoming a business norm on the modern
web, so this doesn't surprise me too much.

------
calcsam
Engineer at Zenefits. Can confirm this.

~~~
lambdasquirrel
Since we conveniently have an inside man, which one of the payroll providers
would you recommend us use when we start a startup?

~~~
goeric
Use ZenPayroll. They've had a good relationship with Zenefits since the start.
And they're both YC, so it's unlikely that will ever end.

------
Osiris
When I started working at the startup I'm at, we were using Zenefits and
Expensify. For some inexplicable reason, in the last few months everything got
switched to ADP and Concur, both of which offer a worse experience than what
we were using.

------
enknamel
If ADP doesn't want to work with a competing third party that is their right.
This is why you should never base a business on the goodwill of a platform. We
saw the same shenanigans all the time in social and mobile gaming.

~~~
SomeStupidPoint
Zenefits isn't relying on goodwill -- they're actually a subcontractor of the
customer of ADP, so ADP is actually blocking their own (paying) customers. ADP
is saying that they'll delete the logins of customers who use a particular
subcontracting firm, because they don't want their customers to use that
firm's services.

I think you don't quite understand what the situation is here.

------
randall
Just sign up for ZenPayroll first and then back port into zenefits. That's
what we did.

------
jgalt212
Yes, Zenefits seems to be a nice wrapper around other services with bad UI/UX.

That being said, we researched using Zenefits for our 401k, and they work with
Ubiquity. Ubiquity has a very nice front end we saw no reason to have a
Zenefits account just to access Ubiquity.

------
rvdm
I've been very happy with ZenPayroll for paying my employees so far. Going to
check out justworks though.

------
fweespeech
Yeah, this is why relying on potential competitors generally leads to all
sorts of sadness. :/

------
cgoodmac
I'm biased since I work there, but it's worth checking out justworks.com -
payroll/benefits/HR/everything in one place, no need to integrate with
different providers.

------
mergy
I'm very surprised ADP would even open themselves up like this to a
competitor. The mythical ADP API has been hovering around for years. It feels
like ADP just "fixed the glitch" in "Office Space" terms.

Anyone going with an ADP competitor is going to have to get fully off ADP.
This is a big risk for companies. ADP knows this and the overhead around
compliance and other back-end work is massive. Any company trying to innovate
in the HR space has the security blanket of ADP to combat.

For those that take the risk on companies like Zen* or *Zen need to weigh it.
ADP has already had to open-up a bit and improve systems over the last few
years to go mobile and improve UI enough to not make it totally horrible. But,
it typically comes down to compliance vs. innovation and ADP is the former. If
ADP did "fix the glitch" here, it reaffirms the risk and peril of innovation
when you still are dancing with the 800lb gorilla. HR folks don't want the
headache of that dance and that is why ADP usually wins unless you can totally
lap them.

------
uvince
Appropriately ADP responds with a PDF: www.adp.com/zenefits/downloads/The-
Facts-About-ADP-and-Zenefits.pdf

~~~
smsm42
Well, at least it's not a Word file, so some credit must be given.

------
rexreed
Why bother with ADP when there are so many other payroll solutions. The better
option for startups with better things to do than manage HR and operations, is
to use a PEO like TriNet and not even bother with any of this. Focus on your
core business and outsource everything else.

------
threefour
I once had COBRA benefits administered by ADP and they everything they could
to boot me off, and once they did they made a mockery of the appeals process
(this was before the day of the Affordable Care Act when getting health care
could be impossible otherwise).

------
obornii
CFO - Current user of zenefits & ADP here

I authorized Zenefits to look into our data. ADP's feelings on how Zenefits
looks and grabs that data are moot (also, how would they know if they are
unsecure).

This is not an "unauthorized_ integration" because I specifically signed
Parker Conrad to be my broker of record.

I understand where ADP is coming from (they tried to sell us PEO a month ago,
at at crazy high price) because they can't compete on price or product. So
they compete on access.

However, they messed with our Zenefits Sync without my permission, so now I
will simply replace ADP with Zenpayroll or Wagepoint, or the one people seem
to be throwing around here "justworks".

I will take my $13,000 in payroll fees somewhere else.

------
bigtones
We experienced these problems at my startup using these two technologies too.

------
tedchs
I see both sides of this. It sounds like Zenefits was scraping the HTML
interface of ADP's web site, and according to ADP's response, generating huge
volumes of traffic. Around here, there is a bias that startup = white knight
and incumbent = arrogant and malicious. If it was me, I would have probably
disabled these accounts too under my ToS against negatively impacting the
system for other users.

I also see that Zenefits needs to move quickly. Is there an ADP API they could
be using?

------
noahmbarr
Paychex's idea of an API is a PDF output #nojoke

~~~
olafskyansian
Now now...they are making huge strides in the world of .csv files too

------
scodtt
The Zenefits CEO said ADP was like Dirty Harry. He should say that, because
Clint Eastwood was dirty, but he only killed the "punks." I came up with a
better movie analogy: Paddington Bear:
[https://www.blogmutt.com/blog/zenefits-
adp](https://www.blogmutt.com/blog/zenefits-adp)

------
scottorn
I'm COO of a Startup CFO Firm, Kruze Consulting. We work with 135 startups. We
use Zenefits heavily in our practice and we've signed Zenefits' petition and
are working with Management to spread the word. If your startup is caught up
in this, call my cell 415-652-6380, and I'll help you switch payroll
providers.

------
tomjen3
If the problem is the email address, why not give them one of your companies
emails?

~~~
Someone1234
The way I read it, that would work.

But since the intent of the action is clearly to cut off the competition, why
would we assume they will stop at "just" email address? That's their first
sortie in what could become a long war. Next it could be IP address, then they
could subtly alter their API to break automated access (and give out a
different API to trusted insiders), and so on.

Ultimately when it comes to web-scraping and unauthorised usage, the advantage
is always with the home team. They have the ability to change things any time
they want, and the user is always caught behind every change (and they could
literally change things once a day).

~~~
olafskyansian
I'm pretty sure that aside from Zen Payroll and Intuit there is no actual API
in place.

Why on God's green earth should a change I make in Zenefits take two friggin'
days to show up in ADP? That's not an API. That's a high-school dropout
earning minimum wage entering into ADP they changes you made in Zenefits.

I don't agree with ADP's heavy handed approach, but if this "integration" is
Zenefits' service, they have half a billion in the bank to make it better now.

------
pbreit
This seems as inevitable as Zenefits developing its own payroll service.

------
beachstartup
one reason i didn't sign up for zenefits (other than the sales guy was a pushy
dickhead) was that they weren't able to clearly articulate how they would
integrate with our payroll (a large american bank).

i knew in the end it would be me, typing shit from one browser window to
another, and i knew it would break often.

zenefits sounds great on paper but i'm still unconvinced it's that much better
than just doing things by hand _for small companies_ like ours.

------
anshubansal2000
Boycott ADP. This is mainstream big corporation and their payroll system is
from 80s with ugly UI. Noone even can't login with this old stinking
technology.

Support Zenefits.

------
hurlio333
I sometimes wonder if PayPal is doing this with FreshBooks. FB integration is
fine with lots of providers; for whatever reason PayPal is constantly down.

------
evanm
ADP is in my axis of evil. Their employee and employer-systems are
horrendously out of date and their support is non-existent. Let them fail.

------
c-slice
Why cant zenefits become their own payroll provider?

~~~
nathan_f77
ZenPayroll has been developing payroll software for over 3 years now, and have
only gone nationwide in the last few months. It's a very complex product to
build.

------
footballguy
ADPs technology is so far advanced relative to Zenefits it is not even close.
Anyone with any know Edge of these systems knows that.

------
whoiskevin
I have to put the blame on Zenefits here. You cannot offer something to a
customer that depends on integration with a competitor. Shame on you. No I
don't support ADP and am not a fan but basic business dictates that you should
not even offer this service if it depends on integration with a competitor.

~~~
tomasien
Zenefits' entire service is about re-selling and managing other services.
That's like saying an accountant is at fault for relying on payroll processors
that may someday decide they want to be accountants too - of course they're
not at fault, that's how accounting is DONE. This is ridiculous on ADPs part.

~~~
jusben1369
I'm not close enough on the details so I could be wrong. But it sounds like a)
Zenefits integrates to ADP and starts being the flow through for payroll. b)
Zenefits decides to become a direct competitor to ADP by launching their own
payroll service (ZenPayroll mentioned here) c) ADP isn't enthusiastic about
supporting a service that plans to upsell or cross sell shared customers to
move away from them.

~~~
tomasien
Zenpayroll and Zenefits are different companies and unrelated except that they
both did Y Combinator.

~~~
jusben1369
Thanks to both of you for correcting me

------
kferber007
CFO - Current user of zenefits & ADP here

I authorized Zenefits to look into our data. ADP's feelings on how Zenefits
looks and grabs that data are moot (also, how would they know if they are
unsecure).

This is not an "unauthorized_ integration" because I specifically signed
Parker Conrad to be my broker of record.

I understand where ADP is coming from (they tried to sell us PEO a month ago,
at at crazy high price) because they can't compete on price or product. So
they compete on access.

However, they messed with our Zenefits Sync without my permission, so now I
will simply replace ADP with Zenpayroll or Wagepoint, or the one people seem
to be throwing around here "justworks".

I will take my $13,000 in payroll fees somewhere else.

