St. Charles Health System in Bend will not seek repayment from its employees who may have been overpaid because of a payroll accounting issue caused by a third party vendor, according to a statement issued late Friday.

Instead, the 2,358 staffers who were overpaid a total of roughly $2 million can keep the money or donate as much as they want to St. Charles Cares, a caregiver assistance fund of the St. Charles Foundation, according to a statement by Dr. Steve Gordon, interim president and CEO of St. Charles Health System.

The health system had given staffers a Monday deadline to sign up for repayment plans. About 100 had already settled up, according to the health system.

The action by the health system was praised by the Oregon Nurses Association, which represents 1,200 St. Charles Health System nurses.

“We are excited that St. Charles is doing the right thing,” said Scott Palmer, Oregon Nurses Association director of communications. “This is the first time in a long time that St. Charles is listening to its employees.”

Gordon said in his prepared statement that the health system will seek damages from the vendor, Ultimate Kronos Group, which maintains the health system’s timekeeping and scheduling data.

A ransomware attack effectively shut out St. Charles from timecard data from Nov. 28 to Jan. 22.

While none of the employee data was released, it required the health system to resort to paper timecards or other methods to track employees’ hours and schedules.

“I want to recognize and praise our internal payroll team, our timekeepers and so many more who have gone above and beyond to make sure you were paid as accurately as possible given the information you provided,” Gordon said in his prepared statement. “They have received an incredibly unfair amount of criticism and backlash for a situation that was not caused by them.”

Nurses and techs had passed out petitions on Thursday urging the hospital to conduct a third-party audit of the amounts owed before making payroll deductions.

The petition signed by more than 700 employees also stated that employees did not have any confidence in the health system’s payroll practices.

Like many hospitals, St. Charles has been experiencing financial turmoil after more than two years of operating at or over capacity to care for the community during the pandemic. A nationwide nursing shortage prompted the health system to rely heavily on contract nurses. That combined with a loss of income, has prompted layoffs and a $40 million second quarter loss.

— Suzanne Roig; 541-633-2117; sroig@bendbulletin.com