A month after layoffs, EducationWorks employees still haven’t been paid
The publicly funded nonprofit says it is waiting to get paid, but the city says it’s questioning its “legal ability to pay EducationWorks.”
Nearly a month after EducationWorks, the publicly funded education nonprofit, laid off 133 workers, employees still haven’t been paid the final paychecks they’re owed.
EducationWorks, which runs afterschool programs for Philadelphia and New Jersey public schools and housed workforce development organization PowerCorpsPHL, failed to pay workers for a month before laying them off, citing a “serious financial shortfall due to outstanding accounts receivable and operating costs.”
The layoffs came the same week as the death of CEO Miles Wilson.
In the layoff notice, dated June 5, Chief financial officer Jamil Rivers wrote that workers would get their pay, as well as unused paid time off, “when additional funding becomes available.”
Through a spokesperson, EducationWorks said that the organization itself was waiting to get paid. More than 90% of EducationWorks’ funding comes from city, state, and federal grant dollars, according to its federal tax filing for the fiscal year ending June 30, 2021, the most recent available.
“We believe that there are outstanding receivables for services already earned that will cover compensation to the laid off and furloughed employees,” the statement said. “We are in discussions with those agencies and our lender. Ensuring payment to the employees remains our highest priority.”
In a statement, the City of Philadelphia said, “There are a number of outstanding questions about our legal ability to pay EducationWorks. We are working through these questions and agree that payments to staff should be prioritized.”
The nonprofit’s tax filing said it employed 311 people. It’s not clear how many workers were furloughed this summer.
» READ MORE: EducationWorks lays off 133 employees after CEO’s death, citing ‘serious financial shortfall’
Since the layoffs, workers say they have sent desperate pleas to leadership about not being able to pay their bills and have received frustrating responses.
On June 20, Rivers wrote to staff, “Unfortunately, we did not receive payment in from [Public Health Management Corporation] or the City of Philadelphia. The funders received a notice of default from the lender of our line of credit, the Reinvestment Fund, which prohibits them sending payments to us.”
Two days later, board member Nikki Frazier wrote in an email to an employee that it was rumors that caused the delay in pay.
“A ripple effect was created when there was an inflow of emails from staff and articles written which caused rumors to spread,” Frazier wrote. “Because of the rumors, vendors decided to hold payments owed to us. That has delayed the situation significantly as we have been doing damage control to produce information and financials to prove the rumors false, so they may release funds.”
The Reinvestment Fund did not immediately respond to a request for comment. Neither did Public Health Management Corporation.
In a report on the audit of EducationWorks financial statements for the fiscal years ending June 2021, accounting firm Milligan and Company noted what it described as a “material weakness in internal control over compliance.”
EducationWorks had failed to submit audit documentation on time, delaying the audit process, the report said. EducationWorks had missed these deadlines the previous two years, reports show, despite saying it “developed procedures to ensure supporting documents are retained and readily accessible.”
In the report on the audit for the fiscal year ending June 2020, auditors noted additional issues with EducationWorks’ grant compliance, describing these issues as “significant deficiencies in internal control over compliance.” Those included missing documentation about students and failure to provide required trainings for certain workers.
It’s illegal under city, state, and federal law for an employer to fail to pay its workers, but employers can and do get away with doing so, sometimes even when the U.S. Department of Labor comes after them.
The City of Philadelphia’s Department of Labor enforces the city wage theft law. The city generally does not levy penalties or fines on employers that break the wage theft law.