Dear Lifehacker,
I work for a small company, and everyone here is pretty close. We all get along, and I love the work I do. The problem is that my paycheck just stopped coming several weeks ago. At first I chalked it up to an error, but when I checked with my boss (also the owner), he said things were tough and they'd pay me as soon as they could. I like my job, but I have bills to pay. What should I do?
Sincerely,
Empty Pockets
Dear Empty Pockets,
We can understand where you're coming from, and the answer may not be as easy as it seems: you like your job, and all you want is to be paid for your work so you can keep working. Of course, quitting is always an option, but then you'd be without money and without a job, so that isn't really an enticing possibility, is it?
We've left out some of the specifics of Empty Pockets' situation. It'd be easy to just say "threaten to quit/quit/sue," but there's more to the story here. He notes that the first time he complained about not being paid, the owner actually caved and gave him a check for some of his back pay?but not all of it. Plus, he hasn't gotten paid again since, and he doesn't want to stir up any more trouble because he doesn't know if everyone else is in the same boat he's in (he doesn't think they are, since no one else is complaining about payday.)
We were tempted to just tell him to quit, get a lawyer, and sue for his lost wages, but before we did, we wanted to enlist the help of an expert who's worked on cases like this before. Elizabeth Unrath is a Labor & Employment Law Attorney with the Los Angeles-based Der-Parseghian Law Group. We put Empty Pockets' question to her.
First: An Employer Failing to Pay You Wages for Your Work Is Illegal
This situation is actually far more common than you might think. Whether it's someone like Empty Pockets, or an intern who's been promised a stipend and doesn't get it, or a waiter who collects their tips but never actually gets their supplemental paycheck, this happens all the time. Whatever the situation, the important thing to know is that an employer failing to pay you wages for work you've performed is illegal. Photo by William Ross.
Elizabeth explained that your employer can't just brush you off, and they can't just promise to pay you when they get around to it or things "work out." She notes:
Make sure you get personal contact info for everyone you can, go to your state's EDD website for information about filing for unemployment and also, your state has a Labor Division website (in California it's the Division of Labor Standard Enforcement) that handles wage claims for free. You are entitled to your back pay and penalties, no attorney needed, though you may also want to contact an employment law attorney.
That's right: In many states, you don't even need a lawyer to get what's owed to you. Reach out to your state's labor department to find out the best way to proceed.
If You Don't Think The Money Is Coming, Quit Now
Our first reaction was to tell Empty Pockets to quit, and we're willing to bet most people's gut instinct would be, too. According to Elizabeth, you're better off spending your time and energy looking for someone to work for who'll pay you than working for free for someone who won't. The trouble is, it can be easy to think "Well, at least I have a job. If I quit, then I'll have no job and no money, and what good will that be?" Elizabeth explains:
Actually, as an employment law attorney, I see this situation quite a bit, especially when the economy is bad. My first piece of advice to an employee is yes, you should quit and spend time looking for a new job rather than working for free. However, I have found that most employees are reluctant to do that. They like their job, they like their employer and they feel some loyalty to the company. And this is great, but if your company can't make payroll, that's not a good sign for the future.
Whatever the cause of your reluctance to leave is, try to get past it and look at the economics of the situation. You're working for free, your bills are piling up, and you're putting your faith in the hands of the people who already aren't paying you to sort it all out while you wait patiently. If that all sounds bad, that's because it is. Photo by yoppy.
Worst of all, even if the company does manage to make payroll, and gets you all your back pay, the situation still doesn't bode well. Even if they butter you up with promises or bonuses later, you should be concerned. This on-again/off-again attitude almost never flies at larger companies, but it's often found at startups that depend on funding rounds and angel investment to make payroll. If you believe in or love your work enough that you want to stick with the company through the tough times, that's one thing. However, if the cupboard is bare, love for your work won't stock it with food.
If You Decide to Stick It Out, Here's What To Do
Even though quitting is probably the best option for most people, some find it difficult. If you do decide to stay, evem for the short term, there are a few things you absolutely must do:
Have a Frank, Serious Talk with Your Boss
If you're committed to staying at least long enough to give them a chance to pay you, have a frank discussion with your boss about what's going on and what you should expect. Get to the bottom of the money situation, and insist on honesty. If they can't level with you, walk away. Photo by Michal Kowalski(Shutterstock).
It is time to be proactive and ask, when am I going to get paid? What do our books look like? What jobs do we have lined up? How are you going to ensure this does not happen to employees again? It's sort of like your spouse coming to you and saying "we owe more than we can afford". Your first step would be to open all the bills, look at everything and make a plan going forward. If your employer is not forthcoming and open about answering these questions, then there is no reason for you to keep working for free. On the other hand, I know employees who have been in this situation and were told "we have a contract with this client for next month, we just need to make it for a couple more weeks and everything will be fine" and then paid a bonus for everyone's trouble.
You'll have to make the call for your situation, but I've seen this too?especially in startup culture. As soon as the money hose starts flowing from a newly acquired client or some fresh investment, everyone gets paid, everyone goes back to work, and the company tries to put the bad spell behind them. If you do get an acceptable answer from your employer, decide how long you want to stick it out and hold your employer to their word:
Make sure that if your employer says they are taking a proactive action, like meeting with new clients or selling assets, that they actually do so. Don't hang on too long. If you get to your third pay period without a check, it's time to move on. Additionally, now is the time to be the "squeaky wheel."
Make sure you are in your supervisor's office every day, being a polite pest, about receiving your pay. And don't be afraid to go up the hierarchy. After all, what's the worst they can do, fire you from a job they're not paying you for?
Brush Up Your Resume Anyway
If you do decide to stay, hedge your bets. Update your resume, social profiles, and get the word out that you're available to talk about new opportunities. Even if you're heading into the office with the hope that things are getting better, you should also behave on your off hours like the company is closing or you're about to be laid off. Start taking interviews, scheduling coffee talks, and reach out to your professional network. You might even want to see if your employer's competition has any openings. After all, you'll appreciate having some interviews scheduled or a job offer in your pocket if you show up to work one morning only to find everything locked and your coworkers standing around outside looking confused.
Look for Real, Serious Change: Otherwise, Get Out Anyway
Even if you decide to stay, and even if your employer does pay you later, watch for systemic, substantive change at the company. Someone at the top should be getting fired for it, and there should be some serious changes coming down the line to make sure it doesn't happen again (and the people that let it happen aren't in that position again). If you don't see that kind of change, get out. Photo by Carey Ciuro.
If you must stick it out because you believe in the job or the company, don't let that belief extend to the people who got you into this mess. New investment and new clients usually come with time limits, performance promises, and deliverables. Unless your company takes steps to protect itself and its employees, as soon as you miss a deliverable, run out of investment money, or lose a client, you'll be right back where you started from.
Again, our first and best advice is that you should quit and spend your time looking for someone who's capable of paying you for the work you do, Empty Pockets. If you do decide to hang in there, whatever the reason, we hope that these tips will help you decide where the limits of your faith really are, and make a smart decision as to whether you should tough it out or pack your bags. Good luck!
Sincerely,
Lifehacker
Elizabeth Unrath is a Los Angeles-based Labor & Employment Law Attorney at the Der-Parseghian Law Group. She offered her expertise for this story, and we thank her.
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