State/New England

Published: Friday, October 10, 2008

Credit crunch hits some in the paycheck

By NORMA LOVE The Associated Press

CONCORD – Roughly 200 New Hampshire workers know firsthand what the national credit crunch does to a paycheck.

State Labor Commissioner George Copadis said Thursday that's about the number whose companies had trouble getting needed loans from banks to make payroll over the last two to three weeks.

Some – but not all – of the workers have since been paid, he said.

Copadis said the companies are mostly very small with operations in several states. He said he knows of no New Hampshire banks involved and the state is working with companies having problems so workers get paid.

The Labor Department is getting 800 to 1,000 calls weekly with the majority of the calls related to problems with paychecks. He said 3-4 calls each week are related to companies being unable to get credit to pay workers.

So far, perhaps two-dozen smaller companies – generally with 10 or fewer employees – have been reported to the state, Copadis said. The state is contacting the heads of the companies to try to help them cover their payroll.

"Our first duty, our obligation, is to get those workers paid," Copadis said.

Fines for failing to pay workers on time is a secondary issue, Copadis said.

"We can work with the owner and hold off on fines or reduce the fines," he said.

Copadis said fines vary depending on the circumstances and whether the company has had previous violations. A typical fine can range from $100 to $1,000 per violation – or in this case, missed paycheck.

New Hampshire's community banks say they are not in the same category as the financially large banks in the headlines. New Hampshire's community banks aren't cutting credit lines and are continuing to issue loans, say New Hampshire bankers.

Laconia Savings Bank has been running ads in state newspapers trying to reassure customers the bank is sound and has money to lend.

"During this difficult period, please be assured that Laconia Savings Bank has the strength to weather the storm," bank President Mark Primeau says in the ad running in Thursday's papers.

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